Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

YORK CITY COUNCIL BILL [Lords]

Order for Second Reading read.

To be read a Second time upon Thursday.

Oral Answers to Questions — EDUCATION AND SCIENCE

Unemployed Persons

Mrs. Golding: asked the Secretary of State for Education and Science what plans he has to open up educational opportunities to the unemployed.

The Minister of State, Department of Education and Science (Mrs. Angela Rumbold: ): The development of educational opportunities for unemployed adults in England and Wales is being encouraged by my Department and the Welsh Office through the Replan programme, which began in 1984.

Mrs. Golding: Will the Minister say how many of the 3 million unemployed over 18 years old are receiving any form of education?

Mrs. Rumbold: That is rather a difficult question, but I can certainly undertake to let the hon. Lady have a written reply.

Mr. Squire: Does my hon. Friend agree that many unemployed people are gaining useful knowledge in our adult education colleges, and will she continue to bear them in mind, because the level of funding that they enjoy is but a tiny fraction of the overall education budget?

Mrs. Rumbold: I entirely agree with my hon. Friend. Although the funding has not been substantial, it has been effective, and the programme undertaken by the National Institute for Adult and Continuing Education and the Further Education Unit for Unemployed Adults in colleges of further education has been most successful. It has been providing good opportunities for people to learn about leisure and to receive pre-vocational education to equip them for the future.

Mr. Sheerman: That is a dismal response by the Minster. The potential for educating and training unemployed people is enormous. Could the Minister not talk to the Secretary of State for Employment, Lord Young of Graffham, because it seems that it is possible to

have a Government programme that allows training for unemployed people if they come off the dole queue, but very little or no training or education without people's benefits being taken away. We want people to be allowed to have education and training while retaining their benefits. Why can we not have genuine education for unemployed people?

Mrs. Rumbold: There is genuine education under the Replan scheme. The Restart scheme about which the hon. Gentleman spoke is being carried out with some help from us, but the main opportunities that we provide are taken up under the Replan scheme, which is funded not only through NIACE and the Further Education Unit but through the education support grants which local authorities are helping to fund. They are doing excellent work in providing training and vocational training for the unemployed and are giving them opportunities to use their time in leisure and recreation pursuits while they seek new employment.

Mr. Brandon-Bravo: In the context of the unemployed, does not the Open University play a good role? Will my hon. Friend pay tribute to the extra funding that has been given to that most excellent avenue of opportunity?

Mrs. Rumbold: My hon. Friend is right. The Open University has undertaken to provide a special project for the unemployed.

Higher Education

Mr. Stan Thorne: asked the Secretary of State for Education and Science whether he will make a statement on the levels of pay of non-academic and ancillary staff in higher education.

Mr. Patchett: asked the Secretary of State for Education and Science whether he will make a statement on the levels of pay of non-academic and ancillary staff in higher education.

Mr. Eadie: asked the Secretary of State for Education and Science whether he will make a statement on the levels of pay of non-academic and ancillary staff in higher education.

Mrs. Rumbold: The Government are not involved in pay negotiations for this group of staff and it is for employers to reach agreement on pay levels which they can afford, having regard to recruitment, retention and motivation.

Mr. Thorne: That answer tends to suggest that the Government consider that they have no responsibility in this field. That surprises me, and I should like the Minister to tell us what she proposes to do to overcome the problem that universities in particular presently face.

Mrs. Rumbold: The hon. Gentleman will know that a quantum of money goes to the universities. The pay bill that applies to both academic and non-academic staff must be regarded as one item within the overall resources that are agreed by the Government, and it is for the universities to decide how it is spent.

Mr. Patchett: Will the Minister accept that over 90 per cent. of manual and clerical workers in universitites are on almost poverty level wages for a full week's work? Is she prepared to reconsider her recent answer on this question and to do something about it?

Mrs. Rumbold: I have no doubt that a very important contribution is being made by that group of people, but I must reiterate that it is for the universities, within their overall resources, to decide their priorities and to allocate money accordingly.

Mr. Eadie: Is the Minister trying to tell the House that her Department and the Government escape responsibility for people on very low pay, which is the question that we are discussing? Does the Minister agree that 90 per cent. of those upon whom we are focusing our minds are receiving under £100 a week, and that two-thirds of the clerical staff receive no payment whatsoever for overtime? We are talking about very low pay and the Minister, on behalf of her Government, must accept some responsibility.

Mrs. Rumbold: It is quite obvious that the Opposition do not understand. The universities obtain a grant from the Government. It is then for the universities to negotiate within the proper forum the kind of pay agreement that they want. Within the totality of the money that is given, it is for the universities to decide their own priorities.

Mr. Patrick Thompson: As many of the ancillary and non-academic staff in universities are particularly concerned about matters involving the organisation of universities and the organisation of meetings at universities, many of my constituents who do these jobs are very worried about something that is happening today at the University of East Anglia. The Labour club there is being addressed by the hon. Member for Linlithgow (Mr. Dalyell), at a time when the University of East Anglia has asked for the postponement of a meeting that is to be addressed by my hon. Friend the Member for Billericay (Mr. Proctor). Does that not suggest double standards and is this not—[Interruption.]

Mr. Speaker: Order. I should have thought that that question was miles wide of pay.

Mrs. Rumbold: I understand that my hon. Friend the Member for Buckingham (Mr. Walden) has written a letter to my hon. Friend the Member for Norwich, North (Mr. Thompson) and that he will be receiving an answer to the point that he has just raised.

Mr. Andrew F. Bennett: Will the Minister confirm that the Government announced that additional resources were to be made available for the universities? Will she also confirm that there is considerable confusion in the universities because they do not know how much each of them will receive, or how much the Government insist should be earmarked for academic and for non-academic salaries? It would be helpful if the Government would tell the universities the figure for academic salaries, so that the universities can decide whether any money will be available for the very low-paid groups of people who are in non-academic posts in universities. Will the Minister accept that the Opposition are appalled by the very low wages that are paid to some of the non-academic staff in universities?

Mrs. Rumbold: I register what the hon. Gentleman said about non-academic pay. The answer to his first question is that that matter will be decided at the beginning of next year. It is quite clear that the hon. Gentleman does not understand that the money is allocated to the universities and that it is for the universities to decide their priorities.

Mr. Bennett: But how much? The hon. Lady has not told the universities how much is available.

Mrs. Rumbold: They will learn how much money is to be made available for academic pay early next year. It is entirely up to individual universities to decide, with the proper unions, how the money is to be allocated for the restructuring of academic and non-academic staff.

School Buildings

Mr. Park: asked the Secretary of State for Education and Science what representations he has received in the past three months on the state of repair of school buildings.

Mr. Pike: asked the Secretary of State for Education and Science what representations he has received in the past three months on the state of repair of school buildings.

The Parliamentary Under-Secretary of State for Education and Science (Mr. Bob Dunn): My right hon. Friend has received no major representations on this subject. The repair and maintenance of school buildings is raised from time to time in correspondence from hon. Members and from members of the public.

Mr. Park: Is the Minister aware that an Audit Commission study in 1985 showed that Coventry education department was underspending, because of financial constraints, by £1 million a year, which is about 100 per cent., and that as a result the schools in Coventry are in urgent need of repair and renewal? What does the Minister propose to do about that?

Mr. James Lamond: It is nothing to do with the Government.

Mr. Dunn: Responsibility for the organisation—[Interruption.]

Mr. Speaker: Order.

Mr. Dunn: I congratulate Labour Members on their interest in this matter. As they know, the condition of school stock has been arrived at over 20 years of benign, and sometimes malign, neglect. Labour Members have to take their share of the responsibility. I remind the House that the Labour party was in power for 11 out of the past 22 years. When it admits its share of the blame, we shall start to listen to its points.

Mr. Pike: Will the Minister nevertheless accept that the Conservative party is now in office, and that there is a problem? The Secretary of State recently visited Lancashire and is aware of the problems there, and of the fact that much money is needed to put the schools in good order. What will the Government's response be? Will they help or will they continue to sit aside and let the situation deteriorate?

Mr. Dunn: On the hon. Gentleman's first question, the Conservative party is in power, and we shall be for the next 20 years at least. Secondly, local education authorities are constantly telling us that one of their priorities is to spend more on the repair and maintenance of education buildings. The planned increase of 18·8 per cent. in cash in 1987–88 over 1986–87 plans provides for them to meet this and other priorities.

Mr. Lawler: Does the Audit Commission report not show that the problem is not one of cash leaving the


Government, but rather where it is going, and that £700 million is being wasted by local authorities on maintaining surplus places? Will my hon. Friend assure us that strong steps will be taken to force local authorities to take speedy action so that areas such as my constituency, where there is a fairly unusual problem of rising rolls, can have money allocated to them so that they can repair buildings?

Mr. Dunn: An awful lot can result from the good management of our schools, as my hon. Friend said. I cannot comment on allocations that have yet to be announced.

Mr. Lord: Does my hon. Friend agree that in the problem of the costs of repairing school buildings, as in many other problems, a trouble shared is a trouble halved? Is he aware that in my constituency, in the village of Mendlesham, we have just built a brand new school, funded jointly by the community and the local education authority, which is to be used for both educational and community purposes? Does he not warmly welcome this exciting new project?

Mr. Dunn: I welcome that partnership, which is such a tremendous, dynamic and go-ahead partnership by the people in this constituency. It shows what sensible, good-natured and responsive people they are.

Mr. Madden: I was staggered to hear the Minister say that he had not received any major representations about the condition of schools. Does he not recollect being in Bradford recently, when he expressed concern about crumbling schools in that city? Does he not recognise that the ratepayers of Bradford are becoming heartily sick of Education Ministers coming to the city, drinking ratepayers' tea and giving very little in return except expressions of concern?

Mr. Skinner: Tea and sympathy.

Mr. Speaker: Order.

Mr. Dunn: If the hon. Member for Bolsover (Mr. Skinner) had a brain, he would be dangerous. If local education authorities spent less money on anti-sexist, anti-racist, anti-capitalist and anti-police activities they could probably do a lot better in terms of repair and maintenance.

Mr. Sayeed: As the Audit Commission has clearly shown that local authorities are often inefficient in applying funds to schools, will the Minister issue guidelines to local authorities enouraging an extension of the Cambridgeshire scheme, which permits heads to exercise control over money spent on their schools?

Mr. Dunn: I am totally enamoured of the Cambridgeshire experiment. It is our intention to ensure that it becomes widespread in the fullness of time.

Mr. Radice: The Minister must be well aware that the Audit Commission and HMI have warned the Secretary of State about the "crummy" state of our schools. [Interruption.] I was quoting from the former Secretary of State's verdict on our schools. Will the Minister now tell parents what the Government will do about it?

Mr. Dunn: We have announced a massive increase in expenditure, a figure of 18·8 per cent. Local authorities have it within their gift to embark upon the privatisation of non-teaching services. Therefore, they can save money for expenditure on education where it is needed and where it is desired.

Teachers (Pay)

Mr. Hicks: asked the Secretary of State for Education and Science what is the latest position regarding the teachers' pay and conditions of service negotiations; and if he will make a statement.

The Secretary of State for Education and Science (Mr. Kenneth Baker): Over the weekend a National Union of Teachers special conference voted narrowly to accept the proposals in the Advisory Conciliation and Arbitration Service document signed by the local authorities and some teacher unions. The NUT is now balloting its members. Local authorities meet today to discuss the proposals. I remain willing to hold further discussions with the local authorities and any of the teacher unions.

Mr. Hicks: I support my right hon. Friend's objectives in encouraging responsibility and rewarding the good classroom teacher. However, will he accept that there is a genuine predicament in the case of the good classroom teacher teaching in our excellent smaller schools in villages and market towns? Having achieved the maximum after nine years, they could well find themselves locked in and their chances of subsequent promotion very limited.

Mr. Baker: One of the major flaws of the ACAS proposals is exactly that. I am sure that it would affect adversely the small primary school. Under the ACAS proposals there would be no promoted posts in about three quarters of primary schools. Therefore, there would be no incentive for teachers to do well unless they sought to become a head or a deputy. However, deputies in the small schools would get only £5 a week more than the main professional grade teachers under the ACAS proposals.

Mr. Fatchett: Since his statement last week, and in his reply to the earlier question, the Secretary of State has made it clear that he is prepared to meet the employers and the unions, and that he is prepared to be flexible about his own suggested imposed settlement. Will the right hon. Gentleman give some indication of the areas of his settlement that he is prepared to be flexible about?

Mr. Baker: In the meetings that I have had with Councillor Pearman and the unions so far—another union has asked to see me next week—I have made clear the conditions behind the Government's position, which is that any offer should come within the cost envelope of some £600 million for this year and next year, and must have a sufficient number of incentive posts in it to ensure a good career structure for the young, able and energetic person who wants to become a teacher.

Mr. Pawsey: Will my right hon. Friend accept that the majority of parents and, I suspect, teachers, will welcome the introduction of legislation that will bring some form of order into the chaos that currently surrounds negotiations on teachers' pay? Will my right hon. Friend further accept that once the legislation is on the statute book it will be warmly welcomed as a means of preventing further disruption in our schools to the disadvantage of our children?

Mr. Baker: When the definition of the teacher's job—contained in appendix 1 of the ACAS document—is in force, it will be clear what teachers should and should no do. It will be out of order and a breach of contract if


they indulge in the sort of disruptive action that has so damaged schools, the education of our children, and the reputation of the teaching profession.

Mr. Freud: Does the Secretary of State accept that one cannot impose a solution on teachers? Will he reassure the teachers who want to see him that not only his door but his mind will remain open?

Mr. Baker: I have made that absolutely clear, but I hope that the hon. Gentleman is a spokesman for the Liberal party. Since I have held this post, I have listened to what he has said. I have yet to distinguish any issue concerning education on which the Liberal party's views differ from those of the Labour party. I hope the hon. Gentleman will recognise that, in the career structure of the profession, there must be proper incentive posts and proper rewards. I should have thought that that was one of the elements of Liberal thinking such as we know it.

Mr. Haselhurst: Does my right hon. Friend sense that he is very close to an agreement which will satisfy the majority of teachers, and certainly the majority of the public? Does he agree that, in the end, the prize will be more glittering if he can achieve a settlement by agreement?

Mr. Baker: Certainly. That is why I said that my door remains open. What Mr. McAvoy said has made the situation more difficult. Following the NUT conference, Mr. McAvoy, the deputy general secretary, said:
There is no likelihood of our agreement being changed as far as the NUT is concerned.
He added:
It was 'sad' other unions felt there was an alternative.
He then said:
There is an alternative—and that is a return to action and disruption".
I utterly deplore that statement made by a major figure of the NUT.

Mr. Barnett: Does the right hon. Gentleman realise that, as Secretary of State, perhaps his most important priority is to get the confidence of the teaching profession as a whole? Does he agree that he will do that only if he is prepared to negotiate, listen to what the teachers say and recognise that their view about the way in which salary scales should be organised must be taken seriously if he is to gain their confidence?

Mr. Baker: The hon. Gentleman must appreciate that, in this matter, there is no collective view of the profession. Two unions did not approve the draft document. Since then, other unions have made it clear to me that they do not agree with an element of the structure. There is no agreed professional view of the position. That problem has been inherent in the trouble for the past two years. There has been very muddled progress over that period, as the unions and the local authority employers have not been able to agree. Alas, that is still the position. That is why we have to introduce a Bill. That is why I have to make the Government's position clear.

Mr. Greenway: Is my right hon. Friend aware that it is said that some 1 million people are incapable of correctly filling in their applications for British Gas shares? Does this not show that their education was somewhat inadequate? Does it not point to a clear need for a total restructuring of the salaries of professional teachers and of their conditions of service so that this does not occur in future?

Mr. Baker: There must be other objectives to the education system than a facility to fill in prospectuses. None the less, I agree with my hon. Friend. There is considerable disquiet about the quality of education at all levels in our schools. The dispute is an important opportunity to improve the quality of the teaching profession. We must not forgo that opportunity.

Mr. Flannery: The Secretary of State, in his first answer, avoided the issue. He did not make it clear what was the issue at the recalled conference of the NUT, at which I was present. The issue was not his offer. The teachers are united in their disagreement with it. The issue was the employers' offer, which, with the union's agreement, still has to be submitted to the right hon. Gentleman. One hundred thousand or so people did not agree with that offer—which is far better than the Secretary of State's offer—and 125,000 did agree with it. The important word in the main question is "negotiations". If the Secretary of State tries to impose his will on all the unions without negotiations, he will unify them, and he will disrupt schools once again.

Mr. Baker: One must appreciate that the NUT has made it clear that it is not prepared to move at all. It has not moved since Coventry. That is what the deputy general secretary of the NUT said. The hon. Gentleman is a member of the NUT. Does he agree with the sentiment:
There is an alternaive—and that is a return to action and disruption"?

Mr. John Townend: Does my right hon. Friend agree that in the past decade there has been a considerable improvement in the teacher-pupil ratio, without an equivalent improvement in the quality of education? If so, will he resist the demands for more teachers and more free periods and concentrate the available resources on rewarding good teachers who are conscientious and accept responsibility?

Mr. Baker: I agree with my hon. Friend that there has been an improvement in the pupil-teacher ratio from 18·9:1 to 17·6:1 while we have been in office. I also agree that that has not necessarily been accompanied in all our schools by an improvement in the quality of education. I think that all hon. Members are concerned about that. The whole thrust of the Government's and my proposals is to improve the quality of the teaching profession by having proper incentives and rewards for at least half the profession, whereas the ACAS proposals cover only a third of the profession.

Mr. Skinner: Does the right hon. Gentleman recall that on 23 September this year he said to a meeting of educationists, "I worry about the present extension of central control. I want more decisions to be taken at the rim of the wheel and fewer at the hub"? If so, why is the right hon. Gentleman poking his nose into the teachers' negotiations?

Mr. Baker: The hon. Gentleman must realise that only 10 minutes ago my hon. Friend the Minister of State was being pressed to interfere in the wage negotiations in our universities. I stand by exactly what I said. The hon. Gentleman will see, if he studies the Education (No. 2) Act 1986, the very wide, extensive reforms that we are introducing to increase the power of head teachers and governors. That is what I want to do, but the Labour party is opposed to it.

Mr. Favell: Does my right hon. Friend feel that the time has come to remove the local authorities from the pay equation? After all, the teachers want to negotiate national conditions and the people want national curricula and national standards in our schools.

Mr. Baker: There is little doubt that there is a move, which I support and will encourage, towards national curricula. As regards the future of determining teachers' pay and conditions, the Teachers' Pay and Conditions Bill, which will have its Second Reading next Monday, will set out our proposals for an interim advisory committee. I am sure that many people will welcome the fact that the Burnham negotiating machinery is coming to its end.

Mr. Radice: Is the Secretary of State prepared to accept any modification at all to his proposals, or is he merely delaying until he has got his legislation through Parliament so that he can impose a settlement on the teachers and the employers? We are entitled to know the answer.

Mr. Baker: The answer is that on 30 October I set out the Government's conditions and provided a further £600 million. Since then there has been no move towards the Government's position. Some of the unions are saying to me that they would like to reconsider their position. I am willing to listen.

Education Act 1981

Mr. Dormand: asked the Secretary of State for Education and Science if he will make a statement on the working of the Education Act 1981.

Mr. Dunn: My right hon. Friend will shortly be undertaking a review of the provisions of the Education Act 1981 and its associated guidance to local education authorities, health authorities and social services departments in the light of recent research findings. Any possible amendments will be the subject of consultation with interested bodies in the usual way.

Mr. Dormand: Although the recently published survey, which the Minister has not mentioned, shows that there are many problems associated with the integration of handicapped children into ordinary schools, does he agree that the main difficulty arises from the insufficient provision made by the Government? Is he aware that there is deep and growing concern among parents—I am pleased to have the Minister's assent—at the slow progress in meeting the aims of the 1981 Act? Will he therefore consider constituting a special unit in his Department to monitor and develop progress towards the aims of the Act? Unless something is done about that, the hon. Gentleman will soon be accused of not caring about the provisions of this important legislation.

Mr. Dunn: I acknowledge the hon. Gentleman's concern. As he knows, a short while ago the Department of Education and Science funded a three and a half year project at the University of London institute of education to study the developments within local authorities following the introduction of the 1981 Act. We are now studying the implications of that project and we shall return to it at some time in future.

Mr. Haselhurst: Does my hon. Friend accept that, although there have been some early and obvious benefits from the implementation of the Act for handicapped youngsters and their classmates, there are still problems

—for example, in small village schools of ancient construction which have difficulties in handling wheelchair cases?

Mr. Dunn: My hon. Friend is right about that difficulty. We would all like to spend more money on special education, but much good work is being done within existing resources. As he knows, all local education authorities now operate the procedures introduced by the 1981 Act.

Mr. Andrew F. Bennett: Does the Minister accept that the implementation of the Act has been severely handicapped because no extra resources have been available to adapt buildings, to provide the extra educational psychologists who are needed to make the statements, to train teachers in the mainstream schools, to provide special provision or to provide speech therapists or physiotherapists from the district health authorities? When will the Government provide the money to make the legislation work?

Mr. Dunn: From the moment that the Act was initiated we always said that financial provision was the responsibility of the local education authorities. I remind the House that the number of children who were the subject of a statement of special educational needs and who were in ordinary schools at January last was 26,423.

Schools (Reorganisation)

Mr. Stern: asked the Secretary of State for Education and Science if he intends to bring forward any proposals to aid the speedier reorganisation of schools by local authorities; and if he will make a statement.

Mr. Dunn: My right hon. Friend intends shortly to issue a circular to local education authorities giving guidance on the action needed to reorganise schools in response to falling rolls.

Mr. Stern: Does my hon. Friend agree that the principal cause of complaints that are heard from time to time about low capitation and poor quality of repairs in schools is the failure of authorities, such as Avon, to reorganise schools, thereby wasting the money that could otherwise be provided to improve standards in schools? Will he allow and encourage authorities to speed up much-needed reorganisation? Will he also take into account the fact that when authorities are contemplating reorganisation, they are often considering a period of three years?

Mr. Dunn: The point of the circular will be to answer just the points made by my hon. Friend. How, when and why local education authorities reorganise their provision is entirely for them, but they must take account of the children and the needs of the community if they do so.

Mr. Carter-Jones: Will the Minister consider carefully the way in which the Education Act 1981—the Warnock Act—could be better implemented, with reorganisation, to enable more facilities to be made available?

Mr. Dunn: I undertake to do just that.

Mr. Peter Bruinvels: Will my hon. Friend look at the administration of our schools, as many teachers who serve on local education authorities appear to act in a negative way, especially in relation to Leicestershire county council


schools? Will he also encourage further single-sex schools to be established, as they are the only real way to allow pupils to develop?

Mr. Dunn: Our role in the receiving sense is simply to take account of the provision as it stands and how it might be shaped for the future. The maintenance of schools of proven worth and of single-sex schools figures highly among our concerns.

Mr. Eastham: Does the Minister realise that the Department of Education and Science is pressing for the economic use of schools? It is recognised that in future some of those places will be required as the numbers increase. Therefore, some authorities are applying under section 13 for closures of one form per school to allow a thinning-out to get over the problem temporarily. However, on occasion, the Department is overruling the recommendations, especially in Tory areas, and that is causing an imbalance in other parts of the city.

Mr. Dunn: The hon. Gentleman seems to be somewhat confused about the provisions of the 1980 Act. Local education authorities can reduce their planned admission levels by up to 19·99 per cent. without recourse to the Department. If they wish to go beyond that, they must have recourse to the Secretary of State. How local authorities respond is entirely a matter for them.

Mr. Teddy Taylor: Has my hon. Friend studied the recent figures which show that the part of the United Kingdom with the highest success rate in A and O-levels is Northern Ireland, where 25 per cent. of all children go to grammar schools? Consequently, will he resist, or look very carefully at, any proposals from county councils that seek to wind up, abolish or undermine grammar school education in places such as Southend, as it is extremely successful and popular?

Mr. Dunn: My hon. Friend, as ever, has his constituency interests at heart. However, we take careful account of all the arguments before approving any proposals for closure or amalgamation.

Student Grants

Mr. Straw: asked the Secretary of State for Education and Science what representations he has received in the past three months on the level of student financial support.

Dr. M. S. Miller: asked the Secretary of State for Education and Science what representations he has received in the past three months on the level of student financial support.

Mr. Nellist: asked the Secretary of State for Education and Science what representations he has received in the past three months on the level of student financial support.

Mr. Stott: asked the Secretary of State for Education and Science what representations he has received in the past three months on the level of student financial support.

The Parliamentary Under-Secretary of State for Education and Science (Mr. George Walden): Since the beginning of September my right hon. Friend has received about 40 representations on the level of financial support for students. In addition, a number of letters have been

received on issues which fall within the scope of the review of student support, including submissions made in response to invitations to submit evidence to the review.

Mr. Straw: Does the Minister realise that, because of the cuts in the real value of student grants, many students face hardship of a kind that has never been experienced before? If a student loan system was introduced, it would remove access to higher education for many students who come from lower income families. As evidence from other countries clearly suggests that to be the case, why do the Government not abandon that idea altogether?

Mr. Walden: The hon. Gentleman is wrong to suggest that the grant has been cut by the extent often claimed by the NUS, which is 20 per cent. The real figure is closer to 12 per cent. The hon. Gentleman has selectively used evidence about the effect of loans in other countries. However, I will look at that carefully and fairly, because I do not want anything in my review to damage the chances of access to higher education by those from lower income backgrounds. A loan system need not do that.

Mr. Nellist: Why have the Government introduced new student grant regulations requiring mature students to have earned £12,000 in the three years prior to going to college? Will that not block access to education by women who have been bringing up families, by the unemployed and by the low-paid? Surely that will block access to the majority of those seeking mature student grants.

Mr. Walden: Not uncharacteristically, the hon. Gentleman has completely misunderstood the point. The number of mature students has increased by 15 per cent. since 1979, and we are proud of that record. Moreover, the change was introduced partly at the suggestion of the NUS and the local authority associations in order to spread the benefit. The hon. Gentleman clearly misunderstands the whole purpose of the benefit. It is not intended for all students who have reached a certain age, but to compensate those entering higher education for any financial obligations that they have built up.

Mr. George Gardiner: Will my hon. Friend give due weight to the growing feeling among students in favour of a mixed grant-loan system? They believe that it offers emancipation from the present system of parental contributions.

Mr. Walden: A fact often overlooked by commentators on this question is that the only people who do not contribute directly to the cost of student support are the main beneficiaries, the students theselves.

Mr. Marlow: Will my hon. Friend seek to reallocate the available finance for student support so that all students are put on an equal footing, irrespective of whether the parents cough up the full parental contribution.?

Mr. Walden: In the course of the review on student support we shall take all proposals into account, including those of my hon. Friend.

Mr. Freud: Accepting the increase in the number of students in higher education, is the Minister genuinely satisfied that, bearing in mind the needs of the nation and the availability of talent, he is doing enough to get students into higher education?

Mr. Walden: We are doing more than many other previous Governments. The real problem is not student


grants, but the quality of education provided in primary schools and upwards. No Government have done more than this one to improve that quality.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Michael Brown: asked the Prime Minister if she will list her official engagements for Tuesday 2 December 1986.

The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.

Mr. Michael Brown: Will my right hon. Friend take time today to consider setting up an official inquiry to consider what precedents there are, if any, for the Leader of Her Majesty's Opposition to intervene in a court case involving Her Majesty's Government by privately contacting the counsel acting against Her Majesty's Government?

The Prime Minister: My hon. Friend has made his point very effectively. If there are any such precedents for this astonishing action, perhaps the deputy leader of the Opposition will let us know.

Mr. Hattersley: In her consideration of these matters, especially what is known as public interest, will the Prime Minister tell us how she distinguished between a book written by Mr. Peter Wright and a book based on information supplied by Mr. Peter Wright? Why did the Prime Minister choose to prosecute or attempt to suppress publication in one case, yet allow, indeed encourage, publication in the other?

The Prime Minister: The right hon. Gentleman is aware that I cannot comment—[Interruption.]—on matters which may arise in the proceedings concerning the Peter Wright case in Australia while those proceedings continue. I also intend to follow the precedent set by previous Prime Ministers and not comment on security matters.

Mr. Hattersley: I am asking the Prime Minister to answer for past errors. Was it not the Government's decision not to take action against Mr. Chapman Pincher in 1981 that has produced their present humiliation? Is that not the result of the authority of the Attorney-General being usurped by the Prime Minister in order to manipulate the law for party political reasons?

The Prime Minister: The right hon. Gentleman is attempting to be mischievous. I shall not answer his questions, however hard he tries.

Mr. Hattersley: Nobody is taken in by the Prime Minister's prevarication on these matters. The House and the country know that the Prime Minister has begun to treat the law as if it were her own property. Hence the Prime Minister's willingness to allow Mr. Wright to sell his secrets to Chapman Pincher, but not to allow him to sell his secrets under his own name.

The Prime Minister: I repeat, it would be inappropriate for me—[Interruption.]—to comment on matters which may arise in the proceedings concerning the Peter Wright case in Australia while those preceedings continue. I also

intend to follow the precedent set by previous Prime Ministers of not commenting on security matters—a precedent to which the right hon. Gentleman adhered when he was in junior office in the Labour Government.

Mr. Heseltine: Before my right hon. Friend the Prime Minister goes back to her timetable, will she ask the chiefs of staff whether they could let us have an assessment of the Labour party's latest alternative to a nuclear deterrent, and whether it could be published? I understand that its alternative is to build a ditch from the Baltic to the Adriatic and to fill it with explosive slurry to deter Soviet tanks.

The Prime Minister: My right hon. Friend makes it abundantly clear that we do not need an assessment from the chiefs of staff. The Labour Party's suggestion is crackers.

Mr. Donald Stewart: Is the Prime Minister aware that, in the light of the present difficulties of the British and American Governments, many people are contrasting the British Government's shady, hole-in-the-corner, sweep-it-under-the-carpet tactics with America, where everything will come out in the wash? When are the people of the United Kingdom to be entrusted with open government?

The Prime Minister: Speaking as a housewife, I think that the right hon. Gentleman became rather confused about his subject. We are fine. How is the right hon. Gentleman?

Mr. Hargreaves: asked the Prime Minister if she will list her official engagements for Tuesday 2 December.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Hargreaves: Is my right hon. Friend aware that the more people learn about the defence policies of the Opposition parties the more they support the Government's policy of maintaining full membership of NATO and retaining our own nuclear deterrent? Will my right hon. Friend take note that last Thursday, 24 hours after a party political broadcast on behalf of the SDP, in which it outlined its defence policy, it not only lost a seat on Hyndburn council to the Conservative party, but came bottom of the poll? Does my right hon. Friend agree that the two events are not unconnected?

The Prime Minister: I congratulate my hon. Friend's constituents and hope that we will have many other similar successes. I am sure that his constituents were entirely right in rejecting the Liberal-SDP defence policy, which is for a deterrent which does not deter.

Mr. Eastham: Rolls-Royce was nationalised by a previous Conservative Government. If the Prime Minister achieves her own way and the company is privatised, and it fails again, will she renationalise it to save the thousands of jobs that will be lost?

The Prime Minister: Rolls-Royce is doing very well and winning excellent orders, and many people both inside and outside the company are looking forward to the privatisation and the wider share ownership that will then ensue, which is anathema to the hon. Gentleman.

Mr. John Townend: asked the Prime Minister if she will list her official engagements for Tuesday 2 December.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Townend: Does my right hon. Friend agree that the spread of AIDS could be greatly reduced if there were a change in public attitudes, especially if indulging in homosexual activities and drug taking could once again become morally and socially unacceptable?

The Prime Minister: I am sure that attitudes are changing in the light of information about AIDS. I am sure also that the most important thing is to ensure that people have full information about how this terrible disease is spread among men and women. I think that then much of the behaviour that has been going on will be entirely unacceptable for many and varied reasons.

Dr. Owen: While we may disagree on how best to make a contribution to NATO's nuclear deterrence, is that as nothing in comparison with the advocacy of a non-nuclear defence strategy for NATO? Does the Prime Minister agree that the Australian precedent, whereby Australia has agreed with the United States that New Zealand, in pursuing a non-nuclear defence strategy, can no longer remain a member of the ANZUS treaty organisation, is exactly the attitude that our European partners will take to the idea that any one NATO country can opt out of NATO's nuclear defence strategy?

The Prime Minister: I agree with the right hon. Gentleman. A nuclear deterrent strategy is a fundamental part of NATO's strategy, and those who do not accept it are very likely to break up the organisation and be unable to remain members.

Mr. Hickmet: asked the Prime Minister if she will list her official engagements for Tuesday 2 December.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Hickmet: May I assure my right hon. Friend that the questions which have come from the Conservative Benches today have not been planted by Mr. Turnbull?—[Interruption.] What damage does my right hon. Friend think that the abandonment of the bi-partisan approach to security matters has done to British security interests, and what effect does she think that will have in the future on our security interests?

The Prime Minister: The abandonment of the bi-partisan approach to security matters is totally and utterly fundamental to Britain's security. The Leader of the Opposition has abandoned a fundamental defence policy pursued by his predecessors. He has now abandoned a fundamental security policy pursued by all previous Prime Ministers.

Mr. Janner: In view of the anxiety which the Prime Minister must have suffered during the past few weeks over the contradictory application and non-application of section 2 of the Official Secrets Act, and in view of her refusal to comment upon that to the House, is she considering amending the Act?

The Prime Minister: As the hon. and learned Gentleman is aware, we tried to amend the Act in 1980 and brought before the House a Bill for that purpose. It was at that time rejected. We have no present proposals to amend it.

Mr. Marlow: asked the Prime Minister if she will list her official engagements for Tuesday 2 December.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Marlow: Would it be possible for my right hon. Friend to arrange today for a special flight for the Leader of the Opposition so that he can come back to the House tomorrow to answer the real allegations that he has been conniving with defence lawyers in Australia in a case against the Crown on the subject of security?

The Prime Minister: It is not for me to answer for the Leader of the Opposition and I am jolly glad that I do not have to. It is for him to do that.

Mr. Tony Banks: Will the Prime Minister find time today to explain to the House why the London fire brigade is having to pay out about £100,000 in order to change the insignia on the buttons, the fire engines and the fire stations because the College of Arms will not let it use the GLC coat of arms? Is that part of the savings from the abolition of the GLC that the Prime Minister promised us?

The Prime Minister: The savings from the abolition of the GLC, as some our constituents have occasion to know, are enormous, and they are grateful that the GLC has been abolished.

Mr. Onslow: As the Leader of the Opposition has let himself be set up to ask in the House questions which were to be asked in an Australian court the following day, is my right hon. Friend aware that she will have the full support of Conservative Members if she refuses to have any more truck on matters of national security with someone who has reduced himself to the status of Mr. Turnbull's mouthpiece?

The Prime Minister: Yes; I agree wholeheartedly with my hon. Friend.

Mr. Kirkwood: asked the Prime Minister if she will list her official engagements for Tuesday 2 December.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Kirkwood: Will the Prime Minister make arrangements to study the board of inquiry report which will be produced on the military aircraft crash which took place in the Borders in Scotland on Thursday night? Is she aware that such crashes are now occurring on average once every two months? Will she give the House an undertaking that she will make sure that low-flying manoeuvres are restricted to the absolute minimum and that they are carried out with procedures which quarantee the maximum safety for civilian life?

The Prime Minister: I understand that a pilot lost his life in that crash, and I should like to extend sympathy to the relatives of that pilot. As the hon. Gentleman knows, the cause of the accident, in which an RAF Jaguar crashed, is still under investigation. Safety regulations for military flying over all designated range areas, and more generally, are matters to which the Government attach great importance. They are kept under close and continual review. I will bear in mind what the hon. Gentleman has said.

Mr. William Shelton: If my right hon. Friend wished to acquaint herself with the course of the trial in Australia directly and speak on the telephone, would she speak to counsel acting for Her Majesty's Government, or would she speak only to counsel acting for Mr. Wright?

The Prime Minister: I think my hon. Friend can rest assured that I would do neither.

Mr. Norman Atkinson: asked the Prime Minister if she will list her official engagements for Tuesday 2 December.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Atkinson: Does the Prime Minister recall that she has often expressed pride in the fact that she was once governor of Imperial college, and that she is a science graduate in chemistry and an associate and friend of Sir George Porter? Has she seen the remarks that Sir George made yesterday, confirming that the continuing brain drain from Britain in science and engineering is the result of the Government's abandonment of science and engineering? What has she now to say about the deplorable state of our laboratories, the deplorable state

of engineering in the absence of some of our key engineers and the deplorable future that faces this country without those scientists and engineers?

The Prime Minister: I read the comments of Sir George Porter. I must state that total net Government expenditure on research and development is at record levels and that the United Kingdom Government-funded civilian research and development, as a proportion of national output, exceeds the level in Japan and the United States, and that is also true for all United Kingdom expenditure on research and development compared with Germany.
With regard to the hon. Gentleman's point about a possible brain drain, I refer him to the fact that tax on top people, including top scientists, is very much lower in the United States than it is here, and it is going down in the United States. The position to which he referred would be infinitely worse had we not reduced the top level of tax to 60 per cent.

Rover Group

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Paul Channon): With permission, Mr. Speaker, I should like to make a statement on developments within certain Rover Group businesses.
On 24 July I informed the House that agreement in principle had been reached on the sale of Leyland Bus and of a majority holding in Unipart and I can report in both cases that detailed negotiations are proceeding satisfactorily. In reply to questions on 5 November, I also announced the disposal of majority interests in Jaguar-Rover-Australia and in Istel. The situation on Land Rover remains as I stated last April, that Land Rover will be retained in Rover Group for a possible flotation or trade sale at a later date.
The chairman of Rover Group has also been reviewing the options for Leyland trucks. This review has been taking place against the backdrop of continuing depressed demand, particularly in overseas markets, and severe over-capacity in Europe. Our objective is to achieve a secure future for the production of Leyland trucks, but it must be recognised that any option for the company—whether related to collaboration, merger, sale or, indeed, continuation under present ownership—will involve restructuring.
Talks are progressing with two companies. The first is DAF. Hon. Members will be aware that in October a limited but important collaboration on the marketing of Roadrunner trucks and Sherpa vans was announced. DAF and Rover Group are now in talks about the benefits that could arise from much more fundamental collaboration in the truck and van businesses. The second is Paccar, the parent company of Foden, which is considering the basis on which it might wish to make a bid for Leyland trucks.
Both sets of talks are at an early stage and, for the reasons I have already outlined, Mr. Day has my full support in pursuing them. I thought it right to inform the House at this early stage and, obviously, I shall keep the House in touch with developments. I am sure hon. Members will understand and accept that it would be prejudicial to the interests of those employed in these operations and in their suppliers for me to make any further detailed comment on the discussions at this stage.
Mr. Day's review of the plans for all Rover Group operating companies, including Austin Rover, will form the basis of the 1987 corporate plan which is now under preparation. After I have received it and given it careful consideration, I shall announce the Government's response. In respect of Austin Rover, I should, however, like to take this opportunity to emphasise that I expect Mr. Day's plan to set out a positive course for the continuation of the company as a major producer and leading exporter of cars made in Britain. I stress that the Government's aim is to secure the best possible future for Austin Rover, its suppliers and the motor industry generally in this country.

Mr. John Smith: In essence, the Secretary of State has announced two sets of talks. My first question is: are they alternatives? The first proposition, namely with DAF, appears from the statement to be an extension of existing collaboration which appears to be proceeding satisfactorily and which offers market opportunities for the Rover group. Clearly,

that is desirable, if it is a true collaboration between equal, independent companies. The second is a takeover attempt by another foreign-owned company for Leyland trucks. Given that General Motors appears to be persisting in its decision to end truck making in the United Kingdom, if this goes ahead it would mean that the only volume producing truck maker left in Britain would cease to be British-owned. Why is the Secretary of State encouraging those talks, which will inevitably lead to extensive rationalisation, job losses and the loss of British ownership and control of a crucial part of our engineering economy?
Since we now have some advance notice of discussions like this, unlike the activities of one of the predecessors of the Secretary of State, now the Chancellor of the Duchy of Lancaster, who sought to sell British Leyland and Austin Rover without informing anyone, will the Secretary of State take the opportunity of having full consultations with the relevant trade unions, to which this statement will be news? [Laughter.] I do not know why the Chancellor of the Duchy of Lancaster should laugh about the notion of consulting the trade unions. It is all too indicative of his attitude to British industry and the people who work in it. Would it not make sense for the Secretary of State to seek at this stage to give the fullest possible information and to allow the fullest possible consultation with the trade unions?
Finally, while I note the Government's apparent conversion to maintaining Austin Rover as a major car producer, will the Secretary of State appeal to the Prime Minister to stop knocking Austin Rover as she did in a recent interview in the Financial Times? When will the Government see Austin Rover as a great opportunity for Britain, not as a problem, as the Prime Minister unfortunately described it?

Mr. Channon: I entirely repudiate what the right hon. and learned Gentleman said about the interview of my right hon. Friend the Prime Minister in the Financial Times. He will know that the Financial Times issued a correction. Indeed, as £2·2 billion of public money has been put into Rover group, it ill becomes him to criticise the Government for not supporting the company.
Obviously, there will be consultation with the trade unions in the normal way through the normal machinery on the future plans of the company. I note what the right hon. and learned Gentleman says about the question of Paccar as opposed to DAF. It is far too soon at this stage to say how the talks will progress or what the final outcome will be, but I note what he says.
Regarding the truck industry in Britain, I must again remind the House that there is 40 per cent. over-capacity in the truck industry in Europe. It is not possible to imagine that this position can continue without change and any hon. Member who advances that seriously is doing no service to those who work in the industry.

Mr. Michael Grylls: Does my right hon. Friend agree that, as the taxpayer owns 98 per cent. of Rover Group, it is in our interests to recognise that the truck division of that group produces some very good products? We should welcome any new collaboration that will strengthen that group, recognise the over-capacity and even, if necessary, visualise a change of ownership. That could well be in the best interests of all the people who work in that part of Rover Group.

Mr. Channon: I entirely agree with my hon. Friend. They are excellent products, and, as I said in my statement, our aim is to try to ensure a secure future for the production of Leyland trucks. As my hon. Friend says, there is now international collaboration in the production of trucks. We have seen that in Iveco and in Enasa. Indeed, we see such collaboration all over the world. I am sure that that will continue to happen and it is unlikely that we will be able to stand aside. I am determined to have the best possible future for the production of Leyland trucks.

Mr. Paddy Ashdown: We accept that international collaboration is one of the options to be pursued. Does the Minister accept that, of the two options before us, the DAF option is preferable? I recognise that the Minister cannot comment on which of the two is preferable, but does he recognise that DAF, with its established network of retailers and a history of collaboration, is preferable? Many people might regard the Paccar deal as a buy-out to kill off some of the competition. Will the Minister give us two assurances? First, will he ensure that Paccar will not buy up in order to kill off competition and secondly, that the work force in Leyland trucks will be appropriately consulted across the board about the options that lie ahead?

Mr. Channon: The hon. Gentleman asked about the work force. I answered a question about that a moment ago. Consultation will take place through the normal machinery. He asked about the merits of the DAF and Paccar bids, but he will not expect me to comment on that at this time, although I take note of what he says. In considering what recommendation to make to me, the Rover Group board will have to consider all the business plans for the two operations in any proposals put forward. I shall have to consider any recommendation and the total business plans will be a factor.

Mr. Steve Norris: Is my right hon. Friend aware that on two counts his statement will be especially welcome in my constituency? First, it will be welcomed because of the continuing good news about the progress of negotiations about Unipart, which I hope will be brought to a speedy conclusion. Secondly, the statement will be especially welcome in view of the irresponsible speculation about the future of Austin Rover, speculation fuelled almost entirely by the Opposition. That has been wholly harmful to the future and present prospects of the company. The Minister's words are a great reassurance to my constituents and to all those people involved in the future of Austin Rover.

Mr. Channon: I am exceedingly grateful to my hon. Friend for his question. I support what he says and I am grateful to him for saying it.

Mr. Terry Davis: Is the Minister aware that, although collaboration with DAF is welcome because it will increase the sales opportunities for Roadrunner Trucks and Sherpa vans in Europe, any further collaboration, particularly in manufacturing, will be carefully examined in the west midlands to ensure that any arrangement made will not lead to fewer jobs, especially at the Common lane factory which is one of the few growth points in manufacturing industry in the west midlands.

Mr. Channon: I note what the hon. Gentleman says and, of course, any proposed solution will have to be

carefully examined. It would be wrong for me to mislead the House. Whatever solution comes forward will involve restructuring in this industry, because there is 40 per cent. over-capacity in truck manufacture in Europe and there is also over-capacity in the United Kingdom. The House must take that seriously and it would be misleading for me to try to disguise it.

Mr. Robert Atkins: Is my right hon. Friend aware that the foremost aim of my constituents and those of my hon. Friends the Members for Watford (Mr. Garel-Jones) and for Lancashire, West (Mr. Hind) is to secure the long-term future of Leyland trucks, which is centred in my constituency? [HON. MEMBERS: "Reading."] Many people at all levels of the company, including trade union representatives, have pressed me to work for greater collaboration especially in Europe. Does he agree that the work force—[HON. MEMBERS: "Reading."]—whom the Opposition spend their time mocking instead of showing concern about this—have done all that has been asked of them in terms of the product, its marketing and its support. That has resulted in the product taking the largest share of the United Kingdom market.
Finally, is my right hon. Friend aware that two of the biggest problems for Leyland trucks are the need for more outlets in Europe and the United States of America and the need for substantial reinvestment in the new truck range, and that if the discussions provide an answer to those problems they will be welcomed by my constituents at all levels?

Mr. Channon: I am grateful to my hon. Friend. I agree with what he said about the work force and about the work that they have done in recent years at Leyland trucks. I pay tribute to him for his robust defence of their interests on all occasions in this House. Of course more outlets are needed. Investment is also needed, but a profitable company is required to provide that investment. I suspect that greater collaboration is required, whether it takes the form of a merger or something else. A merger is almost certainly or, at the least, very likely to be the answer. I very much agree with my hon. Friend that we should aim at achieving a secure future for the production of Leyland trucks.

Mr. Ron Brown: Is not the problem under-consumption rather than over-production, which in turn is a reflection of the crisis in the capitalist system worldwide? That crisis is made much worse by the fact that the bankers and financiers in the City of London are screwing down many countries in the Third world that would willingly buy British goods, particularly trucks. Is not that the crux of the problem? Surely it has to be admitted that Graham Day, the slick lawyer from Canada, the undertaker of British Shipbuilders, was brought in to destroy the industry rather than to build it up. That is the real issue that is at stake. Let us admit that Mr. Day is a hatchetman for the Conservative Government.

Mr. Channon: That is a rather astonishing accusation. Mr. Day was first employed by the Labour party when it was in government some years ago. I have with me a sheaf of quotations containing glowing tributes to him from all kinds of distinguished people. In particular, the shadow Home Secretary praised Mr. Day at all stages. If the House wants me to do so, I can read out those tributes. The idea that Mr. Day is a hatchetman imported by the Tory


Government, is preposterous nonsense. As to the hon. Gentleman's suggestion that all the troubles in the Third world have been caused by insufficient lending from the City of London to Third world countries, it is not quite like that. There is over-capacity in the European truck industry, and that is a very serious matter. We have to restructure and to do what we can to provide a secure future for the production of Leyland trucks.

Mrs. Ann Winterton: In the continuing discussions between Leyland trucks, Paccar Foden, which is situated in my constituency, and DAF, will my right hon. Friend ensure that full consideration is given to the retention of the maximum number of jobs in this country, not only in the company itself but, just as important, in the components industry?

Mr. Channon: Yes. I entirely understand my hon. Friend's concern, and in particular her constituency interest. When recommendations are made to me, I shall want to consider very carefully the effects on employment. I shall also want to examine the effects on employment of no change in the present position. My hon. Friend is quite right to make that point, and I shall consider it very carefully.

Mr. Dave Nellist: The Secretary of State said that it would be prejudicial to suppliers and to employees to make any further comment at this stage. Is not the real prejudice to those employees and suppliers who run the risk of losing their jobs through privatisation? That has happened in virtually all Leyland privatisation cases, such as Coventry Climax. Is it not incumbent upon the Secretary of State to give those who work for the Leyland subsidiaries every scrap of information that he can about the negotiations or the machinations that are taking place behind their backs?

Mr. Channon: The hon. Gentleman and I have debated privatisation on a number of occasions, and I rather doubt that we shall reach an agreement. He has quoted Coventry Climax to me, and I quote Jaguar to him. That is a record that the House knows very well. As to the work force, I have already said that the work force will be consulted through the normal machinery. I accept that this will have a major effect on people who are very interested in the future of their company. That is understandable. However, I am in a dilemma. Do I tell the House at an early stage what is going on, or do I try to keep the information from the House? It seemed to me right that I should tell the House at the earliest opportunity, even if that means that I cannot give the details that I know that the House would like to have.

Mr. Richard Page: In view of the over-capacity in the truck market, and recalling earlier this year the merger or combination between Ford Trucks and Iveco, I welcome the news that talks are taking place. As last time, the panic reaction of Opposition parties helped to collapse the talks, I urge my right hon. Friend this time to see the talks through to a conclusion, because the longer he leaves it, the more difficult and painful will be the solution. Cannot a great deal of the delay be laid firmly at the door of the Opposition?

Mr. Channon: I entirely agree with my hon. Friend. He will appreciate that at this stage the talks are between

Rover Group and the companies concerned, and are not talks in which the Government are involved. Rover Group will come to us with a recommendation, which may be that it does not like the proposal, but we cannot prejudge that at this stage. I shall then have to recommend its proposal to the House, or not. I shall have to take that decision. I agree that there is no point in ducking these decisions. They become not easier, but more difficult.

Mr. Doug Hoyle: Will the Secretary of State take into account the fact that there is a difference between collaboration and takeover? The right hon. Gentleman keeps repeating that there is a 40 per cent. over-capacity in trucks, but what about vans? Is this not a different situation, with Sherpa expanding and employing more people, and being highly profitable? Will the result of these talks with DAF and Paccar be that the admirable workers in Leyland and elsewhere will be thrown out of their jobs?

Mr. Channon: Yes, I agree that there is a difference between collaboration and takeover. I am not ruling out either course this afternoon—both will have to be considered. There may be a proposal for takeover; that is something that the House will in due course have to consider. I entirely agree with the hon. Gentleman on the need to try to preserve jobs, but in an industry where there is 40 per cent. over-capacity—this is the truck industry, and I accept that the van industry is different—difficult decisions will have to be taken. I shall try to provide the best solution to this difficult situation.

Mr. John Mark Taylor: I welcome the Government's willingness to look at the separate parts of an unnatural aggregation differently, and perhaps find different solutions for them. I note that my right hon. Friend holds in prospect for Land Rover in my constituency a trade sale or flotation. Will he accept that the people of Solihull would greatly prefer an option that left the shares of Land Rover in the hands of British subscribers?

Mr. Channon: I know my hon. Friend's views, as he has expressed them on many occasions with considerable force and effect. There is no change in the position of Land Rover from the statement that I made last April. I shall bear my hon. Friend's view in mind. There is no immediate prospect of any change in the situation. I referred to Land Rover in my statement because I thought that it would reassure my hon. Friend. I think that he will find that all is well so far, and I hope that he will keep in touch with me.

Mr. Ian Wrigglesworth: Will the Secretary of State confirm that the collaboration that most hon. Members seem to be welcoming extends to the volume car business, and that the proposals that he will introduce in due course will still contain the element of collaboration with Honda that Rover Group has had so far? Will he say a word about the Unipart changes? Do the new arrangements safeguard the after-sales that affect British Leyland's interests?

Mr. Channon: The hon. Member will remember that I made a statement to the House about Unipart a few months ago. That sale is now proceeding. Detailed negotiations are now going on. I do not wish to go into the full details at this stage, but the situation has not changed since my statement. I think that the hon.


Gentleman's concerns are covered, but if not I shall write to him. I am making no statement about collaboration in cars, but dealing merely with collaboration in the truck industry. I do not wish to mislead the House. The answer may well be a merger, and the House must understand that I am saying that there may be mergers or takeovers in the truck industry. We should not rule out that option. I have nothing to say about Rover Group, Honda or anything like that this afternoon. My statement relates to the truck industry.

Several Hon. Members: rose——

Mr. Speaker: Order. I have to bear in mind the subsequent business on the Order Paper. It is an Opposition day. I ask hon. Members to put their questions succinctly. I shall allow them to go on for a further five minutes.

Mr. Andrew Faulds: May I congratulate the right hon. Gentleman on his greater awareness of a need to consult the work forces than that shown by his predecessor? May I ask him to disregard the chuckles of his right hon. and ghastly colleague the Chancellor of the Duchy of Lancaster and ensure that those consultations are genuine and meaningful?

Mr. Channon: The hon. Gentleman spoils his case by his epithets. As I have made clear to the House, the employees who may be affected will have the opportunity to express their views on future plans for the company through the normal machinery at the appropriate time.

Mr. Anthony Beaumont-Dark: Does my right hon. Friend accept that many of us are grateful that he has come to the House at an early stage in the many negotiations that are going on? Does he also accept that we are pleased that he confirms his faith in the Austin Rover car group and the Rover Sterling Car, which is doing such good trade? Does he agree that, while Ford Motors is expanding its spares business, it would be unwise for us entirely to sell off Unipart, which is so important to Austin Rover's future? Will he try to ensure that at least 25 per cent. of Unipart stays in Austin Rover hands so that it cannot be blackmailed by other people?

Mr. Channon: I note what my hon. Friend says. I share his view about the merits of the products of Austin Rover. I am looking forward to hearing Mr. Day's plans to set out a positive course for the continuation of the company, which, as I have said to the House, is a major producer and leading exporter of cars made in Britain. As to the sale of Unipart, my hon. Friend will recall that I announced that some months ago. I think that the points about which my hon. Friend is concerned in relation to the Leyland group are fully covered. However, I shall bear in mind what he said.

Mr. Jack Straw: Whenever the Secretary of State comes to the House to make a statement on Leyland, why does he seek to cast the company's prospects in the worst possible light? Does he accept that the 40 per cent. overcapacity in Europe arises principally from the non-tariff barriers which the French and Germans place in the way of exports from this country, and that Leyland trucks division in this country has been top of the sales league? Why did he not mention that? When he speaks of the fact that changes will involve restructuring, will he say how many jobs in Lancashire are likely to be lost by such restructuring?

Mr. Channon: With respect, that is an unfair way of putting it. In fact, it is practically counter-productive. I am not trying to set this in its worst light. I am trying to find the course that is most likely to provide a secure future for the production of Leyland trucks in the circumstances of over-capacity in Europe of 40 per cent. I am trying to be realistic and not mislead the House. I am trying to make the House, if I may, face up to what is a very difficult position and to tell the truth.
As to job losses, I have already explained that, whatever happens, there is bound to be some element of restructuring. I cannot tell the House today what job losses will take place, because negotiations are still going on. I make no comment about that. I have already said that there is 40 per cent. over-capacity and there is bound to be restructuring. It is impossible for anyone to stand at the Dispatch Box and pretend that there is no danger of job losses. Opposition Members would not do that if they were in my position.

Mr. Simon Coombs: Is my right hon. Friend aware of the fact that the right hon. and learned Member for Monklands, East (Mr. Smith) recently visited the Austin Rover body pressing plant at Swindon, without mentioning the fact to either of the two hon. Members who represent that area, and that, while he was there, he joined the local trade union representatives in spreading scare stories which have scared to death my constituents and the constituents of my hon. Friend the Member for Devizes (Mr. Morrison)? Will my right hon. Friend make it clear to the House that the Government have no plans to sell Austin Rover to Honda and no plans for major job losses and closures of plants?

Mr. Channon: I am sure that my hon. Friend's constituents are sufficiently robust to stand up to the blandishments of the right hon. and learned Member for Monklands, East (Mr. Smith) and that they will show their continued good sense by supporting my hon. Friend. As I said at the end of my statement, I expect Mr. Day's plan to set out a positive course for the continuation of the Austin Rover companies, a major producer and leading exporter of British cars. I do not think that I can go any further than that. Frankly anyone who says that we are doing something different is talking nonsense.

Mr. Robin Corbett: The Secretary of State stood at the Dispatch Box and said that he could see no difference between collaboration and merger.

Mr. Channon: indicated dissent.

Mr. Corbett: Does he understand that there is all the difference in the world between collaboration and capitulation? Can he name another industrialised country whose Government would contemplate flogging off what is left of Britain's industrial base to foreign ownership?

Mr. Channon: The hon. Gentleman is exaggerating the position. At an early stage, I came to the House of Commons to tell the House about talks that are going on with a number of companies about possible collaboration or merger. The hon. Gentleman's language is greatly exaggerated. I have never tried to disguise the fact that there is a considerable difference between collaboration and merger—of course there is—nor have I sought to disguise that, in the end, there may be a merger, and we


will have to consider whether it is a good idea. I am not trying to mislead the House. That is certainly an option in front of us.
I was asked a question about Unipart a moment ago. I remind the House that we are selling a majority shareholding in Unipart, but a minority position will be retained.

Mr. Tom Sackville: Does my right hon. Friend agree that the activities of the right hon. and learned Member for Monklands, East (Mr. Smith) and his friends earlier this year effectively sabotaged the United Kingdom truck industry? Is my right hon. Friend aware that Conservative Members have the highest confidence in him during these and future negotiations to ensure long-term jobs in the industry?

Mr. Channon: I am extremely grateful to my hon. Friend. The attitude of members of the Labour party during all these negotiations has been one of making mischief, stirring up trouble, trying to cause maximum alarm and despondency and trying to create the very situation about which they complain.

Mr. Norman Atkinson: When the Secretary of State talks about collaboration or merger, does he not use code language for takeover? That is what the Secretary of State is talking about. Is he aware that Leyland truck products are engineered to a far higher standard than those of either DAF or Paccar? Why do DAF and Paccar take the dominant initiatives in this matter and talk about the takeover of Leyland rather than Leyland being in business to talk about the takeover of the other two?

Mr. Channon: The hon. Gentleman must understand that Leyland trucks is unfortunately a major loss-making business, not a profit making business. The House should be seriously concerned about that. I do not know why the hon. Gentleman said that I did not mention takeover. I used the words in connection with Paccar, which
might wish to make a bid for Leyland Trucks.
I used those very words. There may be collaboration, merger or takeover. I do not disguise those facts. We shall have to judge whether that is a good thing. The aim is to try to provide the best secure future that I can for the production of Leyland trucks.

Mr. Phillip Oppenheim: I am sure that all Government Members will support any sensible and necessary collaboration. Is it not true that the jobs of many, if not most, Bedford workers have now been lost or will be lost beyond recall? Is it not true that this is almost entirely the direct result of the ill-informed, petty and jingoistic opposition earlier this year to the Bedford merger, emanating from the Opposition spokesman, who is not above trying to squeeze out any little piece of party political advantage, despite the effects on workers in this country?

Mr. Channon: My hon. Friend has spoken with his usual eloquence and good sense.

Mr. Nicholas Budgen: Will my right hon. Friend encourage management to take all sensible steps to reduce the substantial losses in the

truck industry? Will he please avoid public negotiation of the details of these arrangements? The public can never know the true negotiating position of the parties.

Mr. Channon: I entirely agree with my hon. Friend. It would be intolerable to be made to negotiate in public on these details, and I have not the slightest intention of doing so. Fortunately, I am in a position to say that, because I shall not conduct the negotiations. They will be between Rover Group and the parties concerned. They will make some recommendations to the Government, and the Government will then have to decide. I agree entirely with my hon. Friend's first point: everything should be done to try to reduce, and get rid of completely if possible, losses in the truck industry in this country.

Mr. Eric Forth: My right hon. Friend mentioned Istel, a company in my constituency. He will be aware that it is a high technology company, relying on the skills of its existing work force. When considering any proposals for the future of Istel, will the Secretary of State bear that fact in mind? Will he also bear in mind the undesirability of foreign ownership of a company in such a leading edge of technology, with so many skilled people, who must be kept in the company in my constituency?

Mr. Channon: I note what my hon. Friend has said. He will know that Rover Group is taking forward the disposal of a majority interest in Istel. I await its assessment of the various possibilities, but I have not yet received them.

Mr. Tony Favell: Does my right hon. Friend recall that his Department's first thought as to what to do with Westland turned out to be right? Were not his Department's first thoughts as to what to do with Austin Rover also right? Is it not a fact that Austin Rover is still in the most appalling mess? It has an abysmal share of the home market. It has virtually no overseas dealer network. Will my right hon. Friend pick up the telephone and talk to the chairman of Ford UK to see whether he is still interested in bidding?

Mr. Channon: I am grateful to my hon. Friend for his kind remarks about my Department. We certainly would not agree with what he said in the second part of his question. We shall be aiming to secure the continuation of Austin Rover as a major producer and leading exporter of cars made in Britain. I am sure that my hon. Friend desires that as much as anyone does.

Mr. Kenneth Hind: Does my right hon. Friend agree that, whatever party is in power, trucks tend to wear out after the same length of time? Thousands of my constituents who work at British Leyland trucks at Leyland will welcome the collaboration and the extension of wider European markets that my right hon. Friend proposes. Will he reassure those workers that one of the most important things in the Government's mind is to improve their jobs and ensure there will be work for them in that part of Lancashire in the foreseeable future?

Mr. Channon: When we consider these suggestions that the situation should remain unchanged, of course unemployment will be a factor in everybody's mind. I know that my hon. Friend will realise that in a situation of serious over-capacity in the truck industry, neither he nor I would like to mislead anyone employed in that industry into believing that it is not a very difficult situation. In this difficult situation, we are trying to


achieve the most secure future for the production of Leyland trucks. This will not be easy. I understand and sympathise with what my hon. Friend said.

Private Members' Motions

Mr. Rob Hayward: On a point of order, Mr. Speaker. I apologise to the House and to you, Sir, for saying that I wish to change the topic of which I gave notice immediately after the ballot was drawn on 26 November. With permission, I should like to inform the House that on Friday, 12 December I shall call attention to defence products and exports and move a resolution.

Mr. Speaker: I thank the hon. Gentleman for giving me notice of his point of order. I have satisfied myself that this change is within the intention of a change of practice first made in December 1967. I can therefore accept the notice of change of subject which the hon. Member has given.

Business of the House

Mr. Gordon Wilson: I wish to raise a point of order, Mr. Speaker, and I regret that I have not been able to give you notice. It relates to the two motions on Scottish affairs which would refer the subject of agriculture and fishing to the Scottish Grand Committee, sitting in Edinburgh. I was unable to give you notice, because there have been no communications whatsoever about the fact that the Scottish Grand Committee was likely to meet within five days or indeed that it would meet in Edinburgh. The subject that has been chosen—fishing and agriculture—is most important. For that reason, I take no objection to the first motion, nor do I intend to use my right to oppose it when it is called in a few moments.
As I understand it, next Monday has been chosen as the day for the Committee meeting in Edinburgh. It is customary for the parties to be given notice of any change from the normal pattern of business but, in this instance, no such notification has been received by my party from the Government or the Opposition.
I hope, Mr. Speaker, that, with your usual courtesy, you will consider upholding the rights of minorities in the House and make sure that the debate—as I have said, I have no objection to it in principle—takes place on a date for which more than five days notice has been given. If it is not within your powers to take such action, I hope that the Leader of the House will consider withdrawing notice of the later motion, which I understand is to be called later this evening.

Mr. Alex Fletcher: Further to the point of order, Mr. Speaker.

Mr. Speaker: Is it on the same subject?

Mr. Fletcher: Yes, Mr. Speaker. Can you think of any reason why Opposition Members who are anxious to transfer Scottish business from the House to Edinburgh are reluctant to transfer themselves to debate that business?

Mr. Speaker: I cannot do anything about that. The hon. Member for Dundee, East (Mr. Wilson) has an option when I put the question on the motion. The best way to deal with this matter would be through the usual channels rather than through the Chair.

Parliamentary Papers (Printing)

Mr. Richard Hickmet: On a point of order, Mr. Speaker. You will be aware that difficulties have been experienced in obtaining today's Order Paper and Vote, but what were those difficulties? There is some concern among Conservative Members that those difficulties may have arisen because of the very large number of early-day motions tabled in my name criticising the Leader of the Opposition for his collusion with Mr. Turnbull in the Australian case. Will you investigate to ascertain whether those beliefs are unfounded?

Mr. Speaker: I did not have notice of the hon. Member's point of order, but I anticipated that a question might be asked about this matter. I assure the hon. Member that the difficulties at HMSO are nothing to do with his large number of early-day motions. I regret that the Vote bundle was not available in the Vote Office at the usual time today. I understand that this was caused by an industrial dispute at HMSO. The emergency printing service has been brought into operation and I am informed that the papers started to become available at 9.30 this morning.

Mr. Hickmet: I am grateful, Sir.

Court Hearing (Ireland)

Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker. You may know that today at 5 minutes past 12 the news bulletins announced that the Government had taken a sound thrashing in the Irish courts on their application for an injunction to prevent the publication of the book "One Girl's War" by Joan Miller—

Mr. Speaker: Order. I do not know what happened—

Mr. Campbell-Savours: It is absolutely genuine.

Mr. Speaker: Order. Allow me to say that I do not know what goes on at 5 minutes past 12 because notice of intention to raise these matters must be given to me before 12 o'clock.

Mr. Campbell-Savours: It is precisely on that matter that I rise to my feet, Mr. Speaker. If the news had been known before 12 o'clock, I should have been able to apply to you to give due notice of my intention to make a Standing Order No. 20 application.
In the light of the decision by the Irish courts, my application would have been made with a view to seeking a statement from the Government on why, having lost in those courts, they should carry on with the proceedings in Australia. In view of the fact that the announcement was made after 12 o'clock, I should like to know whether you accept that I have a right to make that Standing Order No. 20 application tomorrow so that we can hear of the matter then.

Mr. Speaker: The hon. Member knows the rules even better than I do.

BILL PRESENTED

NORTHERN IRELAND (EMERGENCY PROVISIONS)

Mr. Secretary King, supported by Mr. Secretary Hurd, Mr. Secretary Younger, and Mr. Nicholas Scott, presented a Bill to amend the Northern Ireland (Emergency Provisions) Act 1978; to confer certain rights on persons detained in police custody in Northern Ireland under or by virtue of Part IV of the Prevention of Terrorism (Temporary Provisions) Act 1984; to regulate the provision of security services there; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed [Bill 11.]

SCOTTISH AFFAIRS

Ordered,
That the matter of Agriculture and Fishing in Scotland, being a matter relating exclusively to Scotland, be referred to the Scottish Grand Committee for its consideration.—[Mr. Lightbown.]

STATUTORY INSTRUMENTS &c.

Mr. Speaker: By leave of the House, I shall put together the questions on the six motions relating to draft statutory instruments.

Ordered,
That the draft Asian Development Bank (Fourth Replenishment of the Asian Development Fund) Order 1987 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the draft Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment No. 2) Order 1986 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Education (Students' Dependants Allowances) (Amendment) Regulations 1986 (S.I., 1986, No. 1325) be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Education (Mandatory Awards) (Amendment) Regulations 1986 (S.I., 1986, No. 1397) be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Education (Mandatory Awards) Regulations 1986 (S.I., 1986, No. 1306) be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Teachers (Colleges of Education) (Scotland) Amendment Regulations 1986 (S.I., 1986, No. 1353) be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Lightbown]

Orders of the Day — OPPOSITION DAY

[2ND ALLOTTED DAY]

Insider Dealing

Mr. Speaker: Before I call on the Opposition Front Bench, I must announce to the House that I have selected the amendment in the name of the Prime Minister.

Mr. Robin Cook: I beg to move,
That this House notes that the low levels of investment in manufacturing industry achieved under Her Majesty's Government have been accompanied by increased speculation in the City over company ownership and excessive rewards for their dealers; records its concern at the evidence of insider dealing in the financial markets and the low clear-up rate in those cases referred to the Department of Trade and Industry; rejects Her Majesty's Government's policy of leaving law and order in the City to self-regulation by the City; and deplores the failure of Her Majesty's Government to secure proper supervision of the City in time for its deregulation.
It may reassure the House if, at the opening of the debate, I say that the Opposition, in tabling a motion on fraud in the City, were not trading on any inside information that on Monday the Government were about to start a fraud investigation into one of the largest companies in Britain. As a Scottish Member, I am bound to say that for a long time it has appeared to me that Guinness's bid for Distillers was an extremely seedy transaction. As an Edinburgh resident, I am familiar with Guinness's undertaking that it would move the headquarters of the merged company to Edinburgh. The kindest thing that can be said about it is that as yet it has not done so.
I am aware also of the other undertaking by Guinness that, if its bid went through, it would appoint the governor of the Bank of Scotland as the chairman of the merged company. It did not do so. Having reviewed all the options and alternatives available to him, the chief executive of Guinness came to the impartial conclusion that the best man to be chairman of the company was himself.
It is possible, in the light of yesterday's developments, that we shall see a further reason why it was felt that the governor of the Bank of Scotland was an inappropriate person to be chairman of the merged company. I shall wish to return to the subject of the Guinness bid, but it is appropriate to kick off the debate with it. The takeover of Distillers was the largest takeover in the City's history.

Viscount Cranborne: Bar one.

Mr. Cook: I am happy to agree that it was one of the two largest takeovers. I shall concede that point immediately in a spirit of seeking common agreement and I look forward to seeing the hon. Gentleman with us in the Division Lobby.
The takeover was the high mark of the City's passion for takeover bids this year. Last year, £6 billion in takeover bids was staked in the City. That in itself was a record, beating all previous years, bar none. In the first 10 months of this year, £30 billion has been staked in takeover bids in the City—five times last year's entire amount.
We come to the paradox at the root of the problems of the British economy. The City of London is one of the three major financial markets in the world. That major financial market is set in an economy in which output is stagnant, visible trade has achieved a deficit of heroic proportions and investment in manufacturing industry is declining from its earlier miserable level. One of the wonders of the economy is that the City none the less finds it possible to raise astronomic funds with which to gamble with the ownership of the British industry, in which it shows so little interest in investing.
I note that the Government amendment states that the City has raised £6 billion for investment in British industry in the past year. I willingly accept that as a matter of fact. I hope that the Minister will accept that it is also a matter of fact that last year in the City there were transactions in shares to the value of £396 billion. Against that enormous turnover, it is asking the House rather much to expect it to be grateful that £6 billion of that £396 billion went into creating new investment, new plant and new machinery. The fact is that the City, in contrast to the industry around it, appears to be going through what can only be described as its champagne period, reflected in champagne salaries for those who deal in shares in the City.
Last year's accounts for Morgan Grenfell make interesting reading. We discover from them that no fewer than 47 directors of that merchant bank were paid more than £100,000 a year. One hundred thousand pounds a year is a generous reward. It is equivalent to the entire income of five head teachers or four surgeons.
If the directors of Morgan Grenfell want to claim that their output has the value of five head teachers or four surgeons they would expect those teachers and doctors to say in return that the very least that they could accept for not seeking to emulate the rewards of the Morgan Grenfell directors is a high standard of probity on the part of those receiving them. Alas, Morgan Grenfell hired Mr. Geoffrey Collier and paid him a salary of £300,000. That did not appear to prevent him from seeking to have his bit on the side, which, if successful, would have netted him, in an overnight transaction, as much as the Secretary of State for Education and Science is prepared to pay an unpromoted teacher for a full year's work.
I shall not mince words. Insider dealing is theft. I hope that hon. Members in all quarters of the House will accept that. It is appropriate to put that on the record as last week Sir Martin Jacomb, the chairman of Barclays de Zoete Wedd, made a rather curious observation. He observed that insider dealing was "a victimless crime". Of course there are victims of insider dealing. If there were no victims, the insider would not make his killing. Try telling Scrimgeour Vickers and Company, the company on which Mr. Collier practised his sting, that it was not a victim.
It is worth recalling that the money circulating in the City and the wealth in which the City trades every day does not belong to it. The source of the power and the wealth of the City are the pension fund contributions of millions of workers and the insurance premiums of those same millions of ordinary men and women. Ultimately, they are the victims if the bases on which the deals are struck in the City are not honest and above board. I have no doubt that most of those who trade in the City are honest dealers. I accept that most people in the City are even more infuriated than any hon. Member at the revelations of the past three or four weeks.
However, it is difficult in the face of the evidence to accept that Mr. Collier was an exception. He was an exception solely in that he was brought to book. There is the evidence of share price movements. Acquisitions Monthly conducted an interesting and compelling study of the movement in share prices preceding the announcement of a takeover bid. During the first six months of this year the magazine discovered that in 78 takeover bids the average rise in share price in the three months beforehand—in the three months before anyone else had heard of the takeover bid—was 25 per cent. In some cases the share price rise comfortably outperformed the average. Bush Radio registered an increase of 80 per cent. in its share price three months before a takeover bid for the company was announced. Spencer Clark Metals registered an increase of 60 per cent. There is also the more recent example of the BTR bid for Pilkington Brothers plc. In the six weeks preceding the announcement of the bid for Pilkington Brothers plc the share price rose by 73p. The revealing aspect of the increase is that during that period when BTR announced its bid, rather frostily it also stated that it had suspended buying shares in Pilkington six weeks beforehand. Plainly the increase was not the result of its bid for Pilkington but the result of someone else, somewhere in the City, continuing to buy after BTR had ceased to apply for shares.

Mr. John Evans: Is my hon. Friend aware that Pilkington Brothers plc is the world's leader in the glass industry and that many thousands of my constituents in St. Helens rely for their livelihoods and their well-being on its continued prosperity? is he aware that the allegations of insider dealing and of people in the City of London making fast bucks out of the work which has been put in by those men and women for generations are causing much anger and hostility in my constituency? Will my hon. Friend make it clear to the Minister that this is a classic case that should be investigated by the Government to establish whether there has been any insider dealing in those shares?

Mr. Cook: I heartily echo my hon. Friend's conclusion that it is plainly a matter which merits further investigation and we hope that it will be pursued vigorously.
Of course we accept that, given the salaries that are paid in the City, companies in the City expect to command the best brains in the country. Nevertheless, it would require remarkable purity of soul to believe that the share price increase which I mentioned, and which the hon. Member for St. Helens, North (Mr. Evans) has confirmed, and the other average rises to which I referred earlier, were simply the product of dispassionate analyses of the financial pages. That would require remarkable innocence on our part. Plainly, much of it turned on well-placed information.
There is also another source of evidence of insider dealing. I am sure that the Minister will recall that I put down a written question on 24 November asking how many cases of insider dealing had been referred to him by the Stock Exchange Council. The reply was "about 100". There is a disappointing degree of imprecision there. We shall not catch the financial jugglers in the City unless we can count up to 100. I am indebted to the Financial Times for revealing yesterday that the full figure is 110. I accept that 110, with a reasonable degree of of extension, is about 100. However, the figure that I find much more arresting

—if I can be forgiven the term—is the other figure, that out of the 110 only nine were prosecuted. No wonder the Financial Times yesterday referred to the Department of Trade and Industry as the Inspector Clouseau of insider dealing. If we allow the Department of Trade and Industry to count in its statistics not simply prosecutions for insider dealing but all forms of fraud in the City, we are still left grubbing around in single figures.
Last year there were only five prosecutions for all forms of fraud in the City. Indeed, JMB, the largest scandal to have hit the banking world in the City for a long time, has resulted as yet in not a single prosecution within the City. Yet the Government have hauled 138,918 social security claimants before the courts and prosecuted them for fraud. There was no imprecision there. The total figure has been carefully logged and recorded. Each of those people were prosecuted for a figure that would barely pay for a lunch in the City.
It is difficult to consider that figure of five and that figure of 138,000 without seeing double standards leaping out from the pages. The Government are not pursuing fraud in the City with the same resources, the same commitment and the same energy as they dedicate to fraud in the social security system. The real City scandal is not that some people in the City grab their chances when they see them but that too many of them during the past six years have been allowed to get away with that.
It is necessary only to look at the pages of Time and Newsweek International during the past month to see how much more ruthlessly and successfully the sin of insider dealing is being prosecuted on Wall street. The basis of comparison is not unfair. Mr. Boesky, who gave rise to the headlines about Wall street in Time and Newsweek International, was also active in the City of London. He deliberately limited his involvement in the City of London because, as he said in a diverting comment he found the City of London too leaky. Nevertheless, he was active.
He was especially active in the Guinness bid for Distillers. He built up a large holding in Distillers, which is rumoured to have reached $100 million. He assembled that figure well in advance of the announcement of the bid. At a critical stage in the takeover battle he dumped on the London market—not on Wall street—a large block of shares in Argyll. That had the effect of depressing Argyll shares and therefore depressing the value of its share offer for Distillers. That was especially relevant since the cash offer of Argyll was always better than the cash offer of Guinness.
Surprisingly, at the same time, Schenley, the United States distributors for Guinness, bought Guinness shares in large quantities on Wall street, thus driving up the price of Guinness, and improving its share offer. Even more surprisingly three months after Guinness was successful in acquiring Distillers, Schenley, no doubt by pure coincidence, was awarded the contract for the distribution of Gordon's Gin which Guinness had acquired from Distillers.
I do not ask anything quite so crude of the Minister as to reveal to the House the nature of the allegations which led to the current inquiry, but I ask him for an assurance that that investigation will look fully into the circumstances of the bid for Distillers. He must accept that if we now uncover improprieties in the bid by Guinness for Distillers, it will take us back to questioning the prudence of the Monopolies and Mergers Commission in giving the green light to the second bid from Guinness.
Before leaving the topic of Guinness, I must ask the Minister to recognise that, if he proposes to leave the markets in their present state of ignorance as to the nature of the allegations, it is intolerable to allow trading to continue in Guinness's shares. Given the ignorance of outsiders about the scope, severity and cost of the allegations, it is impossible to give any meaningful value to the shares. Unless the Minister can tell the House the nature of those allegations, I must urge him to press the Stock Exchange Council to suspend trading in Guinnesses shares.

Viscount Cranborne: The hon. Gentleman said that the investigation instituted by my right hon. Friend the Secretary of State into the Guinness bid concerned fraud. Does he have any evidence for saying that, or does the investigation have a more general remit?

Mr. Cook: The appointment of inspectors has been made under a catch-all provision in the Companies Act, as I think the hon. Gentleman knows. In the light of the strong suggestions made in the financial pages and in the American press, I should be extremely surprised if the appointment was not related to developments during the past months in America. I should also be very surprised if the hon. Gentleman was willing to wager with me that there is not an investigation into fraud at the bottom of it all. We await the Minister's reply, but the hon. Gentleman may wish to press the Minister on that point, as the wider world would appreciate some elucidation of the facts.
It would be unreasonable to expect the Minister to confirm whether investigations into Boesky prompted the current investigation. However, the key to the success of the Boesky investigation into Wall street was the ability of the United States Securities and Exchange commission to press the Swiss bank to divulge the owner of a numbered account. It was the threat of prosecution of the New York branch of the Swiss bank Leu that persuaded it to reveal that the account was held by Dennis Levine, which in turn led to the door of Boesky.
If the Department is serious about stopping fraud and halting insider dealing, why do we not try to negotiate the same arrangement with Swiss banks as the United States SEC achieved? A fortnight ago, that very question was, according to The London Evening Standard, put to a spokesman from the Department of Trade and Industry, who replied:
Maybe we will one day".
That does not smack of ugency or immediacy. If the Government are serious about cracking down on fraud, we are entitled to expect them to begin by blocking off the ways in which fraudsters maintain their anonymity.
There is another lesson to be learnt from investigations in the United States. There is the clear evidence of the SEC's success under its new management, in contrast to the SIB, which the Minister proposes, and which will have the status in the City of a private company, limited by guarantee. Law and order in the City will, as it were, be privatised to that company, and sub-contracted to the City. After the events of the past month, the proposal that the regulation of the City can be left to self-regulation by the City appears to be even more inadequate than when

the Minister mooted it last spring. That is particularly so, since the structure that will give effect to self-regulation will not be set up until halfway through next year.
Let us put a brave face on it, and accept that, as the structure is not now in being, we at least have a chance to abort the whole unsatisfactory project and to replace that structure with something worth while, which will enable the City to have exactly the same sort of statutory Government policing as is now so successful in relation to Wall street.
I anticipate that the debate, like our motion, will go beyond the narrow question of fraud in the City. It will inevitably and should, just as our motion does, touch on the relationship between the City and industry. That relationship has become more difficult as the pace of takeovers has quickened, obliging dealers in shares to shorten still further the time scale on which they base their decisions. Decisions to buy or to sell, which are taken on the momentary flicker of the SEAQ screen, stand in stark contrast to industry's need for investment decisions that will remain stable for up to a decade.
We have the observation of Ernest Harrison of Racal. Last month, he was quoted as saying that he had an infinite number of research and development projects on which he could spend money, but that the effect on his profit and loss account in the short run would be so severe that the investment managers would suspect that the company had hit a particularly sticky patch and perhaps even sell the company out from under him.
It is a bitter comment on the priorities of the City that a decision to invest for the future could become the basis for a decision to sell in the present. Mr. Collier and his conduct stand as an emblem of the City's conduct in that regard. The object of Mr. Collier's speculation was AE, an advanced engineering firm specialising in advanced engineering components, with a record of high investment in new technology, which was beating off a hostile bid for its ownership.
Mr. Collier's contribution to the company's dilemma was to gamble with its ownership via speculation that was launched through a tax haven. It is a sorry tale of greed, sort-sightedness and lack of patriotism. It must be set in the context of the Government's monumental failure to halt such actions or even to set up a structure in the City that could detect or catch that form of fraud. Most of all, it must be set in the context of the Conservative party's connivance with the City's priorities in gambling with the ownership of British industry rather than investing in its future. For that reason, we shall vote for the motion tonight.

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Michael Howard): I beg to move, to leave out from 'House' to the end of the Question and to add instead thereof:
'congratulates the financial services sector on its contribution to invisible earnings, to growth in employment and on the efficient and effective way it raised £6 billion for industry and commerce in 1985; congratulates Her Majesty's Government and the financial services sector on their prompt and effective action against insider dealing; and reaffirms its support for self-regulation within the statutory framework of the Financial Services Act as the most effective system of regulating the City.'.
I am grateful to the Opposition for initiating this debate. It gives me, on behalf of the Government, an


excellent opportunity to make very clear in words what we have already demonstrated by our actions. No one can be in any doubt that we regard insider dealing as a thoroughly pernicious practice which is damaging to markets and unfair to individuals, and which we are determined to do all in our power to root out. I remind the House that it was a Conservative Government who first introduced legislation to make insider dealing a criminal offence—in the Companies Bill of 1973. That fell with the general election of 1974. It is fair to say that the previous Labour Government also tried and failed. But some indications of the priority which they attached to this issue when in Government can be derived from the fact that, having been elected in 1974, they waited until 1978 before making their attempt. That attempt also failed with a general election. But despite those somewhat inauspicious electoral precedents this Government did not wait long before trying again, and insider dealing became a criminal offence under part V of the Companies Act 1980 on 23 June 1980.
This criminal offence has not been easy to prove. This is not due to any lack of effort on the part of my Department or any lack of willingness to prosecute where the evidence was available. The basic problem was the difficulty of establishing the evidence needed to meet the high standard of proof required to secure a conviction for a criminal offence. To prove insider dealing it is necessary for the prosecution to prove beyond reasonable doubt that the accused dealt while he was in possession of information which he knew was both unpublished and price sensitive. The difficulty of proving these matters has by no means been limited to this country. These difficulties have been widely recognised in other countries too.
The hon. Member for Livingston (Mr. Cook) referred in glowing terms to the actions of the SEC in the United States. It is no part of my function to criticise the SEC, but some right hon. and hon. Members may have seen in this morning's edition of The Times an interview with Senator William Proxmire, the new chairman of the Senate Banking Committee. In it, he referred to the SEC's recent record, and said:
The SEC, in 1982, fined nobody for violating inside information. The same thing in 1983 and 1984 and 1985. It wasn't until 1986 that they came along with Boesky whom they hit between the eyes.
Those are not my words; they are Senator Proxmire's. Is it on that basis that the hon. Member for Livingston is urging us to move away from our system towards that of the SEC?
It is noteworthy that on 6 March 1986, when the then Opposition spokesman, the hon. Member for Dagenham (Mr. Gould)—since promoted in the councils of the Opposition—was discussing the Financial Services Act 1986 in Standing Committee, he said that in looking at the models for a regulatory system he had
never thought in terms of the Securities and Exchange Commission".—[Official Report, Standing Committee E, 6 March 1986; c. 520.]
Perhaps the hon. Member for Livingston should have a word with his hon. Friend the Member for Dagenham, before he jumps to conclusions about the model we should follow.

Mr. Austin Mitchell: Given the record of a body which is stronger, more effective and more firmly

based than the body that has been established in this country to deal with similar situations, how effective does the hon. and learned Gentleman expect our body to be?

Mr. Howard: The truth is that the SEC is none of those things in relation to the system that we have put into place. During our deliberations in Committee on the Financial Services Bill, the hon. Member for Great Grimsby (Mr. Mitchell) was accustomed to refer, in glowing terms, to the tutorials, as he put it, to which his hon. Friend the Member for Dagenham, then Opposition spokesman, subjected the Committee on these matters. Perhaps the hon. Member for Great Grimsby could suggest to his hon. Friend the Member for Dagenham that the hon. Member for Livingston, the present Opposition spokesman, could have similar tutorials.

Mr. Gordon Brown: The Minister should take this seriously.

Mr. Howard: I am taking it seriously.

Mr. Evans: I understand the point of the need to acquire positive proof before one prosecutes for insider dealing. Is the hon. and learned Gentleman aware of the widespread allegations concerning insider dealing in relation to the BTR bid for Pilkingtons? Will he consider examining this bid and, if necessary, set up an inquiry?

Mr. Howard: All dealings of that kind which give rise to suspicion are looked at by the stock exchange. If the stock exchange confirms those suspicions it refers the matter to the Department of Trade and Industry. The Department will, in every proper case, not hesitate to make use of the new powers which are available to it and about which I shall tell the House.
The Financial Services Act contains new powers to investigate insider dealing. These powers can, without exaggeration, be described as draconian. The Secretary of State may appoint inspectors if it appears to him that there are circumstances suggesting that there may have been an insider dealing offence. In other words, the Secretary of State has a wide discretion and he does not have to have a high level of proof before he can act.
Inspectors may ask any person whom they think may have information relating to an offence to produce any documents in his possession, or to attend before them or otherwise to give them all the assistance which he is reasonably able to give. Inspectors may examine on oath any person who may be able to give them information about an insider dealing offence. If the person does not tell the truth, he commits the offence of perjury. A statement made by a person in response to such examination can be used in evidence against him. Taken in conjunction with the inspector's power to compel persons to assist them, which I will describe shortly, this means that the right to silence, a cardinal principle of our criminal law, has been substantially eliminated for this offence.
If a person refuses to co-operate, the inspectors may certify that fact to the court, which, after inquiring into the case and satisfying itself that the person did not have a reasonable excuse, may punish him as if he had committed contempt of court. The penalty for contempt is at the discretion of the court and is unlimited. If the person concerned is an authorised investment business and the court so directs, the Secretary of State may also serve a notice cancelling or restricting his authorisation and prohibiting him from entering into certain types of


business. Alternatively, the Secretary of State may prohibit other authorised businesses from transacting business on that person's behalf. This will effectively bar that person from our financial markets. Furthermore, it is not a reasonable excuse for a business to say that it did not know the identity of the beneficial owners of shares or that it was subject to banking secrecy laws if, under those laws, it could have obtained the consent of the beneficial owner to be identified. I think few people would disagree that these powers well deserve the description that I applied a few moments ago—they are draconian. Indeed that was the word applied to them by the Opposition spokesman in another place. It is notable that no additional powers were suggested by the Opposition in relation to insider dealing when the Financial Services Bill was before the House. The hon. Member for Livingston—

Mr. Alex Fletcher: I congratulate my hon. and learned Friend the Minister on the new powers that have been taken to improve investor protection in the United Kingdom and especially the new exchange of information between the regulatory bodies in other countries such as the SEC and his Department. In response to yesterday's decision to appoint inspectors to study the Guinness group, will he assure us that the inspectors will undertake their task on a full-time basis and not simply as just another brief—something which some barristers tend to do—as it is important that they complete their business within months, rather than years. Can my hon. and learned Friend tell the House when he expects to receive their report?

Mr. Howard: I cannot respond to the last request made by my hon. Friend, but I can certainly tell him that the inspectors into Guinness, to which he referred, are in no doubt whatever about the urgency with which it is desired that they approach this task.

Mr. Robin Cook: Although I appreciate that the Minister may find it difficult to say when he expects to receive the report, it may help the House if he uses his imagination and gives us some clue to exactly what it is the inspectors are supposed to be investigating. In view of his withering contempt of the activities of the SEC, can he assure us that the current investigation into Guinness was not prompted by information received from the United States?

Mr. Howard: I have not expressed any contempt for the SEC; I have merely quoted, for the benefit of the House, the words of Senator Proxmire as reported in The Times today. I am surprised that the hon. Member for Livingston expects me to add anything to what was said in yesterday's statement about the investigation into Guinness. Of course I cannot add anything to what was said in that statement and it would be quite wrong and improper for me to do so. On reflection the hon. Gentleman will recognise that it would be quite wrong for him to press me on these matters.

Mr. Robin Cook: If the Minister intends to rest on yesterday's Delphic statement, which tells us nothing, would he accept the point that I put to him earlier that if he leaves the shareholders and other dealers in ignorance about this financial inquiry it is unrealistic and irresponsible to allow shares in Guinness to continue to be traded?

Mr. Howard: That is entirely a matter for the Stock Exchange, which has statutory responsibility for those matters.

Mr. Tim Yeo: First, I apologise for not having been present at the start of the debate. I welcome the greater powers and I share my hon. and learned Friend's description of them as draconian. Would he agree that nevertheless, the acid test is whether prosecutions and, ultimately, convictions follow? It is one thing to have powers but another to bring offenders to book. The best deterrent to insider trading will be a few prison sentences.

Mr. Howard: I appreciate my hon. Friend's interest in this matter. He was responsible for the amendment which contributed, in large measure, to some of the powers which we have taken. I do not think I can respond to the rest of his observations. I am anxious that the powers which are available are used. I shall have a word about that in due course.
In different broadcasts today, the hon. Member for Livingston has separately alleged that the Government responded less than adequately during the passage of the Financial Services Bill, as it then was, to concerns expressed about offshore dealing. On the "Today" programme this morning the hon. Gentleman said that the Government had resisted such measures. On the 1 o'clock BBC television news, he said that the Government response was a watered-down version of the Opposition's proposals. This allegation is entirely untrue.
First, the original amendment on this issue was put forward by my hon. Friend the Member for Suffolk, South and not by the Opposition. Secondly, the Government's response was given an unqualified welcome by the then Opposition spokesman, the hon. Member for Dagenham. He said:
This is one of those welcome occasions when it is appropriate to congratulate the Minister on his response to an expression of opinion in Committee… We have here a determined and fair response to the Committee's concern."—[Official Report, 12 June 1986; Vol. 99, c. 525.]
I hope that the hon. Gentleman will stop making this entirely unfounded allegation. If he will not take the truth from me, I hope that he will take it from his hon. Friend the Member for Dagenham.
It is true, as my hon. Friend the Member for Suffolk, South said, that any statutory power is only as effective as the use that is made of it. We have already brought into effect the new investigation powers, which were in the Financial Services Bill when we introduced it into the House. This was in order to make them available to investigate a suspected insider dealing case. The Stock Exchange referred to my Department certain information on the evening of Thursday 13 November. The order implementing the investigating powers was laid on 14 November to come into effect the next day, Saturday 15 November. Inspectors were appointed on the same day.
I shall refer to some recent events in the City which no doubt prompted Opposition Members to initiate the debate. These events have given rise to considerable interest and much comment. The House will not expect me to comment on cases that are under investigation; it would be improper and irresponsible of me to do so. The timing of the report by the inspectors appointed under the Financial Services Act is a matter for them, but I have made it clear to all the inspectors who have recently been appointed that I expect them to address their task with the


greatest possible urgency. Earlier this afternoon I made an announcement that criminal proceedings have been commenced against Mr. Geoffrey Collier in respect of certain alleged insider dealing offences.
The case of an employee of British and Commonwealth, which was reported in the press, is under consideration by the Stock Exchange, which has just completed a preliminary investigation. The results were received yesterday and are being discussed between my Department and the Stock Exchange.
Nor do I propose to comment on what information may or may not have been exchanged under the memorandum of understanding between the SEC and my Department on the activities of Mr. Boesky or anyone else. The memorandum of understanding which my right hon. Friend the Secretary of State for Trade and Industry signed with the SEC on 23 September requires the Department and the SEC to keep confidential any information provided under it, except for use in the investigation or prosecution for which it was obtained, and also to keep confidential any request for information made under the memorandum. The Stock Exchange has already taken steps to prohibit members from entering into any association, either direct or indirect, with Mr. Boesky and to require members to report any transactions that they carry out for Mr. Boesky or any of his companies.
I give the House the assurance that, in line with the Government's commitment to vigorous enforcement of the law against insider dealing, my right hon. Friend the Secretary of State for Trade and Industry is always ready to appoint inspectors where there is good reason to do so.
The Opposition have shown a fundamental misapprehension about regulation in the City. The hon. Member for Livingston argued in a recent article, and again today, if I followed him correctly, that he would scrap the present plans for leaving law and order in the City to self-regulation, and that he would appoint a public agency with powers of prosecution along the lines of the SEC. That is the way that he puts it. I remind the House, and especially the hon. Gentleman, that insider dealing is a criminal offence for which the prosecuting authorities are the Secretary of State and the Director of Public Prosecutions. The Secretary of State is responsible for appointing inspectors to exercise the investigation powers that I have described. Penalties for non-co-operation are imposed by the courts. This is hardly
leaving law and order to self-regulation by the City
to quote the words of the motion.
The motion tackles a number of other issues and it is as wide of the mark on these as it is on insider dealing.

Viscount Cranborne: My hon. and learned Friend has been most eloquent, and satisfactorily so, about the rigour with which the Government will pursue fraud, insider dealing and other transgressions under the auspices of the Stock Exchange. Will he give an undertaking that the Government will be as rigorous in their approach to criminal offences in the Lloyd's insurance market?

Mr. Howard: I can certainly give that assurance. The difficulty that has arisen in such cases has been explained fully on more than one occasion by my hon. and learned Friend the Solicitor-General. It arises from some of the difficulties in obtaining evidence from abroad, that will be largely removed when the provisions of the Criminal

Justice Bill are enacted. Before that stage is arrived at, these matters are being pursued as thoroughly as possible within the present limitations of the law of evidence.
Finally, I shall deal with some of the other issues that are raised in the motion. It has been suggested that there was some connection between the events to which the hon. Member for Livingston referred and what he has described as the shortfall in investment in industry. That investment rose by 15 per cent. in 1984 to an all-time high, and by a further 7 per cent. in 1985. I do not understand how anyone can argue that shortage of finance for industry is hampering economic growth, and nor would the business community. The latest CBI industrial trends survey found that only 5 per cent. of respondents saw availability of external finance as a limiting factor in their investment plans. Nor do I accept that the Government have downgraded manufacturing industry. Manufacturing is, and will remain, a major contributor to output, wealth and employment. We shall continue to foster a climate in which all wealth creation, including manufacturing, is free to develop and flourish but we do not believe in plundering the nation's pension funds to satisfy the whims of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) in some of the more fanciful of his plans.

Mr. Robin Cook: As the Minister does not appear to have brought with him the figures for investment in manufacturing industry, will he confirm that only a fortnight ago his Department revealed that in the last quarter for which figures are available investment in manufacturing industry was 6 per cent. down on the previous quarter of last year?

Mr. Howard: It is sometimes possible to prove anything with quarter-by-quarter figures. The figures which I have given provide a much more reliable test in comparing what is happening now with what was happening a year ago.

Mr. Alan Williams: The Minister complains that my hon. Friend the Member for Livingston (Mr. Cook) used the figures for the last quarter in his intervention. It seems that the Minister feels that that is inadequate because the period is too short. Let us take the opposite extreme, which is the full life of the Government. Will the Minister confirm that the figures remain 17 per cent. below the level that they had reached when the Government came to office?

Mr. Howard: I did not complain. I merely observed that it was possible to do almost anything by taking quarter-by-quarter figures. I shall not confirm the figures which the right hon. Member for Swansea, West (Mr. Williams) has presented to me. He knows as well as I that the economy has taken a little time to recover from the damage which was inflicted upon it by the previous Labour Government. He knows also that it was unrealistic to expect an improvement to be seen immediately after the 1979 general election.
Having considered the issues raised by the hon. Member for Livingston, I am left in a state of some puzzlement about the Opposition's purpose in holding the debate. Everyone agrees that insider dealing is a pernicious offence. Everyone agrees also that because of the difficulty of proving it, additional powers have been needed to investigate circumstances suggesting that it has occurred. These powers have been provided and are being used.
No further powers have been identified as being needed which have not been provided. What then is the reason


behind the Opposition's motion? Is it a serious concern? Is it a serious attempt to make a constructive solution to the problem? Or is it simply another instance of City-bashing? Is it another example of the Opposition's predilections for attacking at every possible opportunity a sector of our economy which employs over 1 million people, produces 6 per cent. of the total output of the nation and earned £7·6 billion for the balance of payments in 1985? The evidence of the speech of the hon. Member for Livingston suggests strongly that it is the latter, and we shall be scrutinising the remainder of the speeches of Opposition Members in the debate to ascertain whether they enable any other conclusion to be drawn.

5 pm

Mr. Brian Sedgemore: I begin on an entirely modest and uncontentious note. Everyone will agree that one of the best pieces written about the big bang in the City is the booklet by my hon. Friend the Member for Bolsover (Mr. Skinner) and myself, entitled "The City: Big Bang 2000". I recommend it to all hon. Members.
Unfortunately, the name on everybody's lips at the moment is not that of my hon. Friend or myself, but that of Mr. Ivan Boesky. I am bound to say that he is a man of class who should be admired. He wrote a book in which he asks for the plaudits of the crowd because, he proclaims, he is a wizard financial psychologist, a probability theorist, an economic forecaster, and a person with the sublimest intuitive judgment. However, all the time he was a crook and fraudster who was betting on certainties because he had inside information. I could name one or two firms of brokers and merchant banks in Britain who might have been pleased to employ Mr. Boesky.
Fortunately, the SEC caught Mr. Boesky. If I had to decide, over the whole sphere of fraud, between the machinery that the Government have set up and the operation of the SEC, I would come down marginally on the side of the SEC. More and more people in the City are saying that the self-regulatory process—whether right or not for insider dealing—will not work. They are deeply suspicious of it. The fact that practitioners are suspicious of it should make politicians suspicious of it, too.

Mr. Tim Smith: Is not the reverse of that statement true? If the practitioners were wholly happy with the new arrangements, there would be some cause for concern.

Mr. Sedgemore: I accept the hon. Gentleman's gentle debating point. Those issues must be dealt with seriously if we hope to reach a conclusion that will help investors, the public, and perhaps even the good name of the City if it is to earn invisible exports.
I was a little disappointed by the Minister's speech. I accept that he does not know anything about macroeconomics, and I shall not pursue that. My hon. Friend the Member for Livingston (Mr. Cook) picked him up on one or two points. The Minister appeared blind to the issue of law enforcement and what actually happens between his Department and the Director of Public Prosecutions. I jotted down some of the words that he used. He referred to "vigorous enforcement" and used the word "determination". He implied that there was a resolute political will to

resolve those points. Perhaps he should say that to Peter Cameron-Webb or to Peter Dixon, who are in sunnier climes than Britain at present and who are laughing at the attempts of the law enforcement officers to bring them to justice here.
The Minister should also consider the wider aspects. In a parliamentary reply the Attorney-General told me that Lloyd's had submitted the names of 35 people to the DPP on its standard of proof "beyond reasonable doubt", which is the same standard as is used in a criminal court. In fact, only one person has been convicted, and there have been only a couple of prosecutions. In other words, 34 people, having been proven guilty "beyond reasonable doubt" by Lloyd's, have got off. Most of them have not even been charged or arrested, let alone prosecuted or brought to trial. That does not seem to be resolute political will or "vigorous enforcement", nor does it justify the Minister's use of the word "determination".
If the Minister wishes to consider insider dealing, he should explain the figures which my hon. Friend the Member for Livingston gave to the House about the 110 reported cases, from which there have been nine prosecutions and, I believe, only one or two convictions. I am advised that, in fact, there were six.
It is only a few months since Sir Nicholas Goodison, the chairman of the stock exchange, was critical of the DPP about other issues. However, he was also critical of the Department of Trade and Industry's prosecution policy on those cases. I recently discussed that with one of my friends who defended some people charged with City frauds. They were acquitted. I was surprised about that, because the evidence seemed overwhelming. I asked him how he managed it—I should point out that he also prosecutes City fraudsters—and he replied that it was because of the quality of the prosecution, which treated it as a sort of shoplifting case. I have observed some of the people who prosecute on behalf of the Department of Trade and Industry. I suggest to the Minister that his Department should use its best people. If they are not good enough, it should employ better people and pay them higher salaries to carry out what I agree are difficult prosecutions. It is difficult to pin down people because of the nature of the evidence with which one has to deal.
The change in the regulations for financial institutions—the willingness of the City now to allow mergers between banks, merchant banks, brokers, jobbers and moneymakers—makes insider dealing in the City much more likely and certain, as do the amounts of money involved in takeover bids which now run not into hundreds of millions of pounds, but billions of pounds. I understand that in 25 per cent. of recent takeovers, the price of the shares increased on the day before the takeover was announced, and in 60 per cent. of cases the price increased in the previous six months. That suggests—it is not conclusive proof—that more insider dealing has occurred than has come to light, and certainly more than is being prosecuted.
All hon. Members know that the so-called Chinese walls, which are supposed to protect people under the new structure that has emerged in the City, create major problems. For example, if a customer of Barclays bank wants securities work undertaken, it is likely that he will go to the brokers de Zoete and Bevan and to the jobbers Webb Durlacher Mordaunt and Company. If a bank manager at Barclays has dinner with a company director who wants to borrow money, and if the bank manager gets


price sensitive information from the company director, who does the bank manager tell? In theory, he should tell only those who are interested in the money. In a respectable institution such as Barclays perhaps that will happen. However, the problem is that a number of other people at Barclays—for example, the salesman, the fund manager, the corporate financier and the market maker—could have a financial interest in discovering the price sensitive information from the bank manager. It is almost impossible to hold the line between the bank manager and the other four who have a financial interest.
Even if that line is held in a firm such as Barclays through the compliance director or compliance officer, how can that sort of price sensitive information be held if a company is in financial difficulties or is facing bankruptcy? If that is to be a bigger feature of the big bang in the City—I suspect that it will be—it will be almost impossible to hold those invisible walls in the City.
I agree with my hon. Friend the Member for Livingston that most people in the City are not involved in financial scandal or fraud. However, because of the ethos and the rewards, which are now so large, too many people who were hitherto thought respectable are involved. We knew that when the British Telecom applications came out, many people were involved in illegal activities, but none of the big fish was prosecuted and only a few of the minnows were picked out.
I discovered that the Societé Generale Merchant Bank, a French company, put in forged share certificates. A lawyer from the main nationalised bank, Societé Generale, telephoned the merchant bank and told it, whereupon an elaborate cover-up operation was arranged and people were forced to sell off those shares at a loss. The fact that that can happen with a reputable foreign bank in Britain was deeply disturbing.
The Westland affair has been bled dry, but the last point yet to come out about that relates to the purchase of shares, the double prices that were in operation and why some people were purchasing shares behind the scenes but not using them when it came to the critical vote. I and a number of my friends in the City would like to know the precise nature of the activities of Scrimgeour Vickers which has come into prominence recently over the Westland affair. I shall not make any allegations, but the Minister may be able to help us on that.
I served on the Committee which considered the Financial Services Bill. The Minister commented, a trifle unkindly, that none of us put forward amendments to that Bill. However, he knows that I have made two suggestions, which I believe are responsible and sensible, to deal with the problem of insider dealing. I have put them forward by way of parliamentary questions. His answers have been fairly hesitant. If that means that he is prepared to think about them, we shall all be grateful. Those two proposals must be taken in tandem because, although they will not solve the problem of insider dealing, they will go some way to help with what is happening.
My first suggestion to the Minister is that we should prohibit own-account dealing by those who work for firms of stockbrokers, merchant bankers and major financial institutions. Such people would be able to deal on behalf of their clients, but not at the same time deal on behalf of themselves. In one go that would remove an enormous conflict of interest.
In his reply the Minister told me, quite rightly, that some firms operate such restrictions and prohibit own-account dealing. But why do we not ensure that the SIB makes sure that that happens with all firms? I have spoken about this to Conservative Members who work in the City and some have said that they have put that proposal forward in their own firms, but the basic response is, "You have made your money out of own-account dealing. We want to make our money out of own-account dealing." But surely the salaries that people earn in the firms of stockbrokers and merchant banks are sufficient to enable them to live reasonably without going into own-account dealing.
If that proposal were instituted in conjunction with my second proposal, which is that we should register the beneficial ownership of all shares, that would help enormously. We know that people get round insider dealing by using nominee shareholders and trusts, so we do not know the ultimate beneficial owner, and sometimes by using their families. Some people would still cheat, but much insider dealing would be prevented if the beneficial owner of all shares had to be registered, whether the beneficial owner was in Britain or abroad, or was a foreign registered company in Lichtenstein or somewhere like that.

Mr. Anthony Nelson: I have a good deal of sympathy with what the hon. Gentleman is saying, and he knows that we debated this in Committee on the Financial Services Bill. But one still has to ask: how shall we get foreign banks and nominee companies to disclose the beneficial ownership?

Mr. Sedgemore: It would be illegal for anyone to buy or sell stocks or shares in Britain unless they first declared the beneficial owner. That may stop some people buying and selling stocks and shares, but one could make that a precondition of the purchase or sale. I accept that, in the terms in which the hon. Gentleman phrases his question, more international co-operation is needed than exists in the financial world today. One of the lessons on the wider sphere is that there will have to be greater co-operation, even among capitalist Governments, let alone Socialist Governments, if we are to get to grips with many of those problems.
I hope that the Minister will say why he is not prepared to enforce by law, or to encourage the SIB to enforce, the prohibition of own-account dealing and the registration of the beneficial ownership of shares.
Those are the only two points that I want to make. They would be helpful and they would go some way to solving the problem. If the Minister were prepared to accept such proposals, perhaps we would believe that he was determined to enforce the law, that he really was vigilant and that he did have the resolute political will to do something about it. We shall await his reply.

Mr. Tim Smith: The hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) has made two constructive proposals at which we should look. It is not unreasonable to consider excluding own-account dealing for people who work in the City. If I understand him rightly, he is saying that if they have savings which they wish to invest, they must do it through trustees—through an arm's-length arrangement. The present


arrangement is that most employees are required to do their own-account dealing through the firms for which they work. That was certainly the case with Mr. Collier and Morgan Grenfell Securities, and that why he was dismissed. I sympathise with the hon. Gentleman's suggestion. We should consider it seriously.
I agree with much of the theory of the hon. Gentleman's proposals about nominee shareholdings. We need to know the beneficial ownership of shares. It is already possible for companies to demand information from their shareholders on beneficial ownership and in some circumstances it is possible for them to ensure that the rights are removed from the shares—the voting rights, dividend rights, and so on. Therefore, to some extent it is up to companies to take a firmer line. It is wrong that people should be able to hide behind nominee shareholders and avoid prosecution for insider trading.
It is a matter for considerable regret that the hon. Member for Livingston (Mr. Cook) has replaced the hon. Member for Dagenham (Mr. Gould) who spoke on these matters previously. He had few constructive proposals to put forward and, indeed, seemed to be in some ignorance about the Financial Services Act which has only recently passed through the House.
Insider trading is an evil that needs to be stamped out. There are those who would argue that insider trading is somehow no more than a facet of the operation of the perfect market and that it is entirely appropriate that the price of a stock should respond at the earliest opportunity to the latest information available.
That argument is wholly misconceived. Of course it is right that the price of a stock should reflect the latest information, but that information should be made available simultaneously to all actual and potential stockholders. It is wrong that one stockholder should be able to make a disproportionate profit out of information exclusively available to him.
There are those too who say that insider trading is somehow unimportant because it is a victimless crime. The hon. Gentleman referred to that. There is something in that. A number of small investors in McDonald Wheeler lost substantial sums of money. It is difficult to argue that small investors lose money as a result of insider trading, but they are denied the opportunity to profit in the way that the insider does. By the time they become aware of a potential bid opportunity, the price will already have moved up substantially. In that sense, they are victims. Indeed, we are all victims. Everyone other than the insider is a victim of his abuse.

Mr. Robin Cook: The hon. Gentleman may be aware that Scrimgeour Vickers, in its deal with Mr. Collier, sold short, and subsequently found that it had to register a clear cash loss on the deal. To that extent it regards itself as a victim.

Mr. Smith: It certainly did and it was especially aggrieved as a result of that. I accept that it was a victim. Perhaps the only point that Sir Martin Jacomb was trying to make was that the private investor was not directly damaged. However, I do not accept the description of this as a victimless crime. We are all victims of the crime.
Insider trading has been recognised as an abuse for some time. The stock exchange, to its credit, demanded legislation to make it a criminal offence 15 years ago. In

late 1973 the then Secretary of State for Trade and Industry, my right hon. Friend the Member for Worcester (Mr. Walker), introduced a Companies Bill which sought to do precisely that. It was given a Second Reading on 17 January 1974, but, as we have already heard, it was lost with the advent of a general election the following month.
What did the incoming Labour Government do about that? They did absolutely nothing. Their sole contribution to the reform of company law in more than five years was the Companies Act 1976, a puny piece of legislation. For all their protestations of scandal and abuse in the City, they took no action to counter insider trading. How has the Labour party the nerve to criticise today, when all the legislation has been introduced by successive Governments?
It was not until the Companies Act 1980, the insider trading provisions of which are now incorporated in the Company Securities (Insider Dealing) Act 1985, that this matter was dealt with in legislation. We all know that the record of prosecutions since then has not been good. I believe that there are two reasons for that.
First, I am not satisfied that the Department of Trade and Industry has adequate resources for investigating the cases that are passed to it by the stock exchange. Perhaps my hon. Friend would prescribe the resources that are available to him. Does he have either the quantity or the quality of people to undertake these complex investigations?
Secondly, until very recently the Department had insufficient powers of investigation. That has been remedied by section 117 of the Financial Services Act 1986 which enables the Secretary of State to appoint inspectors and then goes on to empower the inspectors to require the production of documents and the attendance of persons and to examine on oath. It is true that during the Committee stage of the Financial Services Act 1986, the only proposals to reinforce those provisions came from my hon. Friend the Member for Suffolk, South (Mr. Yeo) who was concerned about the deals that are organised offshore and overseas. Those were the only provisions put forward; no proposals were presented by the Opposition to strengthen the powers. The fact is that the powers are draconian by any standards, and if they are used, they should be very effective.
More recently, my right hon. Friend the Secretary of State moved with considerable speed to deal with the first case of alleged insider trading to come to light following the enactment of the Financial Services Bill. Mr. Collier was fired by Morgan Grenfell Securities on 10 November. By 17 November, section 117 of the Financial Services Act 1986 had been implemented and inspectors had been appointed.
An example must now be made, although not necessarily of Mr. Collier and certainly not of the minnow employed by British and Commonwealth who aspired to make £800 from his insider trading. The exemplary sentence should be meted out to as big a fish as possible and that sentence should be a prison sentence—a fine will not do. A clear message must be sent to those in the City who would abuse their privileged positions, that society will not tolerate their behaviour. A statutory commission is not the answer. The question of a body to deal with these matters is really almost irrelevant. It is not the body but the available powers which is the important point.
The existence of the Securities and Exchange Commission has not prevented Mr. Boesky and possibly others from insider trading that makes Mr. Collier's alleged offence look like pilfering from the petty cash box. Indeed, it may be that our present arrangements are already too formal and inflexible and involve too high a burden of proof. For that reason, we may need to consider the introduction of civil penalties with a lower burden of proof. As a further deterrent, we should consider an extension of the disgorgement provisions, such that all the assets of a convicted insider trader are assumed to be the proceeds of his trading, unless he can prove otherwise.
I hope that the Government will resist demands for a statutory commission and instead review the resources and powers available to combat insider trading. It is in the City's interest as much as anyone else's that that evil should be stamped out.

Mr. Doug Hoyle: There is an amazing difference in the view taken by the Minister and the view generally taken by the Government in relation to criminal offences. It appears that, as usual, the Government have one law for the rich and another for the poor.
We should not mince words in this matter: we are talking about immaculately dressed spivs who are engaging in criminal activities. The Minister referred to the vigorous action that is being taken, although he did not deny the truth of the figures that were put to him. I hope that we shall receive some explanation as to how, since 1980, there have been 300 cases of insider dealing of which 110 were referred to the Department of Trade and Industry, yet in only six cases have there been guilty verdicts, involving only nine people. That is the sum total. That does not appear to be very vigorous action; rather, it is lethargic.
Several explanations have been made by Tory Members as to what ought to be done—whether there should be better professional expertise or whether more help should be given. However, it is certainly true that the really big fish who are fraudulent in our society are getting away with it. It is simply not good enough to claim that suddenly bringing in legislation will deal with the problem if it is given the chance. In response to the Minister's claims about the Labour Government, I can tell him that this Conservative Government have created a casino society which makes it far easier for people to carry out these dealings.
When we begin to consider the position, we find that people in City institutions are setting up offshore companies. These are the really big fish who are getting away with it. What are the Government doing about that? It is not good enough to allow these people to set up companies in Liberia and the Caribbean. It appears as if crime does pay. These people believe that if they are going to commit a crime, they might as well commit a big one. They will not commit a small one because they believe that there will be a hand at their backs which may fall on their shoulder and they will be put away for it. I agree with Conservative Members who say that there is a real need for one of the big sharks to be caught and put away. These sharks are allowed to swim merrily in the sea and to gain from their criminal activities. The Minister is far too complacent about that.
There was a case not long ago involving an offshore company in Liberia that had never dealt on the stock exchange before. However, in its first dealing, it bought £60,000 of shares that were part of a takeover bid. That is the magnitude of what is happening. They have no fear that they will not get away with it. They operate the set-up and know that they will not be prosecuted. The figures show that that is what is happening.
Of course, these companies are encouraged to do that because the Government are not prepared to take much action over mergers and takeovers. In 1985, £9 billion of deals were completed. This is another way of getting a fast buck. Some 75 per cent. of the suspected cases of insider dealing have involved the purchase of shares shortly to be subject to a takeover bid. If the statistics revealed that such crimes were committed elsewhere in society, there would be an outcry from the Conservative Benches for more action. We would then hear the Minister say that the Government would do something. However, despite the vigour which the Government are acting now, it appears that most of the people will get away with their ill-gotten gains and many more such dealings will take place.
What is happening in relation to Guinness? The Minister made an announcement yesterday about that, but he told us nothing at all. My hon. Friend the Member for Livingston (Mr. Cook) was right to ask whether anything would have happened if the Boesky file had not been passed to the DTI from the United States Securities and Exchange Commission. We are entitled to an explanation as to whether it is because of that that the inspectors have gone into Guinness. We ought to know what is happening It is not good enough that we should be left to speculate. If we examine the Boesky connection and the connection between Collier and Morgan Grenfell, we are bound to draw conclusions.
The Minister and many others have spoken about Ivan Boesky. The Investors Chronicle of 21 November states that Mr. Boesky has been barred from participating in the United States securities industry. It continues:
This does not prevent him from investing privately or acting as a professional overseas, unless specifically barred. London Stock Exchange members have so far only been instructed to consult the Exchange before dealing on Boesky's behalf.
Can the Minister say whether that is true? Is Boesky to be barred from dealing in the United States, but allowed to get away with such activities in the United Kingdom? If so, that is not good enough.
The Government talk about people's capitalism and privatisation bids. People are making a killing and getting away with it. The British Telecom flotation certainly benefited greedy operators. I understood, as did many others, that investors were allowed only one application and a maximum of 800 shares, but close to 7,000 of the 2·3 million applicants were multiple applicants and got away with it. One or two of the minor fish were caught, but big names in the City were involved and nothing has been done about them.
The matter does not stop there. Already 6,000 cases of multiple dealing have come to light in the flotation of the Trustee Savings bank. At the end of the day such people will make a killing. Soon there will be the flotation of British Gas. Will there be more multiple applications? How many fraudulent Sids will there be? Will they again get away with it? That is happening all the time.
The Minister talks about what the Government have done, but we know that they have been reluctant to act and have been shoved into action. We know that the measures that have been taken are half-baked and weak, and will not have much effect. So long as we allow a voluntary system of self-regulation, we shall not do much about the problem. That is the truth of the matter. Tory Members may say, "Even with all the powers that were given to the Securities and Exchange Commission in the United States, look what has occurred there." But look what is happening here, where hardly any powers have been taken.
It is clear from the Minister's remarks that he is not prepared to do much and that the measures will not stop the avarice in the City, those who are out for a quick buck and those who are making the real profits. That is not good enough. Moreover, the salaries of those people are vast. They should be condemned. They should be above suspicion and should not engage in such dealings. They are tarnishing the name of the City of London. They may be a minority, but if nothing is done, they will be a growing minority.
The number of cases of insider trading that have been reported by the stock exchange is disappointing. The stock exchange is extremely disappointed and believes that in many cases there was sufficient evidence to bring a prosecution. But nothing much is happening. Given the Minister's attitude and complacency I suspect that even after today's debate nothing much will happen in future.
I shall give an undertaking from these Benches—I am sure that it has been given many times from the Front Bench—that, when the Labour Government come to power, the City will not get away with the rich pickings that it has been allowed to get away with under the present Government.

Mr. Anthony Nelson: The hon. Member for Warrington, North (Mr. Hoyle), who often speaks on these matters, may be no friend of the City, but he is consistent in his views about the iniquitous practices there, especially illegal ones such as we are discussing today. I have a good deal of sympathy with some of his sentiments, but not with all his solutions.
Insider dealing is undoubtedly rife and more lucrative than ever before. That is clear from the figures in recent years which show the considerable extent to which the price of stocks has risen in the short and medium term before bids have been formally launched. Insider dealing is more lucrative because the market, which trades at considerably higher levels than previously, involves much larger sums and the opportunities for misusing privileged information are much greater.
I disagree with the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) that the real problem is the fragility of Chinese walls. There will undoubtedly be great difficulty in ensuring confidentiality and arm's-length operations of subsidiary companies or divisions within financial concerns. The real problem is not that such information may be misused, as it undoubtedly is now, has been in the past and will be in future. The problem is to prevent its misuse, not only by legislation, but by ensuring that people cannot use it, however they obtain it.
It is impractical to suggest that there is a reasonable hope of preventing people from obtaining information, considering the size, flexibility and freedom of the new financial markets. Many people will obtain information about the contents of a prospectus and the terms of a bid. Everybody from the corporate finance executive to the printer responsible for publishing the information will be privy to the information. What is necessary is not to outlaw such practices and make them, rightly, criminal offences, but to prevent opportunities arising for people to misuse that knowledge. Many hon. Members on both sides of the House have directed their attention to that problem today.
I should like to add some comments and suggestions to those which have already been registered in relation to possible solutions. The hon. Member for Hackney, South and Shoreditch made two proposals which he thought would prevent some insider dealing offences. Indeed, his view is shared both inside and outside the House. His first proposal sought to prevent in-house dealing and to ensure that those who work for financial concerns and are privy to information are prevented from misusing that information by contract, presumably with the company that employs them.
That is a good idea, and some companies already impose that stricture on their employees, but it is unworkable because it is already a criminal offence to engage in insider dealing. If an employee abuses the law by engaging in insider dealing, why should he not also abuse the contractual restriction placed on him to use that information? That will not stop the type of person who is determined to break the law.
I have sympathy with the hon. Gentleman's second proposition in principle, but less sympathy with it in practice. It is to ensure by registration that all beneficial ownership of shares will be made more public and more accurate. In an intervention, I inquired how that would be possible for dealings on international markets, where orders are placed by companies abroad. Even if there were bilateral agreements with countries and banks about the disclosure of beneficial ownership, unfortunately there will always be trading opportunities with offshore concerns and locations, to which people will direct their money and through which they will establish nominee companies and make substantial criminal profits. One substantive move could be made through international co-operation significantly to improve the prevention and detection of this crime. I shall say something about that later. The extent to which full disclosure of beneficial ownership will deter people from engaging in that is limited.
I should like to make some proposals. My first is a reiteration of what I said in Standing Committee during the course of the Financial Services Bill. There is a case for the Securities and Investment Board having the ability to investigate suspected cases of insider dealing. The hon. Member for Livingston (Mr. Cook), in speaking about the powers of the SIB and its status as a private sector body rather than a statutory body, seemed to be under the misapprehension that in some way, even if it were given statutory identity, it would be able to resolve this problem. He may not be aware, but I am sure other hon. Members will be, that, even if the SIB were to be made a full statutory body, it has no powers. Indeed, it is expressly prohibited from having any powers to investigate insider dealing.
In Standing Committee I moved an amendment to give the SIB powers to investigate suspected cases of insider dealing. At that time, and largely at present, cases were initially investigated by the stock exchange. When it has a suspicion, it refers it to the Department of Trade and Industry, which decides whether or not to carry out further investigations or to bring a prosecution. The SIB is ostensibly responsible for the regulation and supervision of the investment markets but it has no legal right, in effect it is expressly forbidden, to investigate and prosecute in a case of insider dealing.
If there are more cases of this kind, my hon. and learned Friend the Minister will have to look at this matter again. It cannot be right to disallow the body responsible for overall regulation and supervision of the investment markets from investigating insider dealing. When I put that to my hon. and learned Friend during the course of the Bill, he said, with a large measure of justification, that the powers granted under the Companies Act 1980 and extended by this legislation have been substantially enhanced. In his words, their nature is draconian and there is no need to extend the right of investigation or prosecution to any body other than the Department of Trade and Industry.
Because these powers of investigation and the burden of proof and the other arguments to which my hon. and learned Friend addressed himself earlier are so draconian and distinct from prosecution and investigation in other criminal areas, he argues that it would be improper to extend those powers to a private sector body or, I suspect, to a public sector body if the SIB were to be made something akin to the Securities and Exchange Commission. I begged to differ with my hon. and learned Friend and that was why I pressed my amendment to a Division. It received a degree of support from all sides of the Committee. It is a legitimate matter to raise again if there is continuing dissatisfaction about the investigation and prosecution of people involved in insider dealing.
I sense that we all hope that the SIB will be responsible on a day-to-day basis for monitoring what the stock exchange council and lots of other self-regulatory organisations are doing. In turn, they will be in day-to-day touch with all the trading activities of the member firms. How can it he right to stop that supervisory body, when it gets a whiff of some criminal activity and suspects insider dealing or when its monitoring through the SROs of daily trade gives rise to suspicion, from either investigating or even drawing that matter to the attention of the Department of Trade and Industry? As a responsible body, it may well do the latter in any case, but we should look at the matter again.
Secondly, the hon. Member for Livingston said that there was a case for a bilateral agreement with the Swiss Government. He may have said the Swiss Government but he should have said the Swiss Federal Bankers Association. Such an agreement would allow disclosure of beneficial ownership or other details of account dealings. That agreement is similar to that which the Swiss have concluded with the SEC in the United States and it is a good idea. I supported that proposal during consideration of the Financial Services Bill.
Many hon. Members may know that the agreement which currently prevails between the SEC and the Swiss Federal Bankers Association provides that where investigations are being made into a suspected criminal offence in the United States, the assets of a person in a

Swiss bank can be frozen and information about the orders placed by a person, where they involve trading on American stock markets, can and will be disclosed—subject to certain safeguards—by the Swiss banks.
This is an important measure, because the agreement meant that, before anyone used a Swiss bank or a financial concern for nominee or trading accounts involving American stocks and shares, he had to sign a contractual form agreeing to the disclosure of such information as a condition of opening an account. It may be difficult and long-term to conclude such an agreement with the Swiss authorities, but it should be a starting point and a model for the sort of bilateral and international agreements which ought to prevail if we are to circumvent some of the offshore media being used by people to obtain rich pickings through insider dealing.
In the end, high standards of probity in this as in other matters will be observed only by the people concerned, but one hopes that, through a combination of legislation, supervision and penalties, one will see higher standards than have been prevalent in recent times. Undoubtedly, insider dealing is an insidious criminal offence because it takes money at the expense of the majority of shareholders. As many hon. Members have said, it brings the City into further disrepute of the kind created by certain other recent activities.
It is not in the interests of any of us to kill the goose that lays the golden eggs, not only for the many people who work in that sector but for British industry at large. The alacrity with which my hon. and learned Friend moved in the wake of recent events to change the law and the measures that he ably introduced during the passage of the Bill, and his response today, have demonstrated, if it was necessary, that the Government are determined to take action where necessary and are not prepared to lie back and oversee and suffer some of the bad practices that have been evident in recent months.

Mr. Charles Kennedy: My contribution will be brief. I support many of the sentiments expressed by the hon. Member for Chichester (Mr. Nelson). He seemed to strike the right sort of balance in looking at this problem. As hon. Members said earlier, it is fitting that this debate should be held today, given the recent developments in Guinness and the decision by the Department of Trade and Industry to send in inspectors.
I should be grateful to the Minister if he could tell us when he responds to the debate what further thinking, if any, has taken place at the Department on what the Guinness bid revealed about the inadequacies of undertakings given at the time of big competitive bids in the past year or two. Those undertakings were subsequently broken or dropped in the aftermath of the successful bid.
I am thinking in particular of the fairly strong talking to by the Secretary of State for Scotland to Mr. Ernest Saunders concerning his commitments to maintain an important Scottish profile as part of a restructured Guinness and to move its headquarters to Edinburgh. The Government ought to investigate promises that are so lightly broken and that leave the Government, and political opinion, with egg on their face. We shall await with great interest the outcome of the investigation. Many people will be watching closely to see what the investigation uncovers.
Reference has been made to the City's image. I agree with the thrust of the argument of the hon. Member for Chichester (Mr. Nelson). It is important to draw attention to the massive resources that the City commands: to the number of people who are employed there and to the finance and capital that the City makes available for investment in British industry. I do not have a pathological mistrust of the City. However, because of its importance, the House is right to debate the issue and to try to stamp out some of the recent practices that have come to the fore in both New York and London.
As for the Boesky case, it is worth letting the man and what he represents speak for themselves. When he was addressing a group of business students in 1985 he said:
Greed is all right, by the way. I want you to know that. You can be greedy and still feel good about yourself.
That is a revealing insight into the type of mentality and into the type of morality that people of that kind have brought to international finance. Anybody like that who operates in the City of London should be weeded out in just as tough and hard a way as took place in the United States. Recently I was interested to read that the gentleman concerned, subsequent to his exposure, said:
If my mistakes launch a process of re-examination of the rules and practices of our market place, then perhaps some good will result.
That suggests a degree of humility which his 1985 statement lacked.
Insider dealings have again put self-regulation on trial. I sympathise with the point that was made by the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) about the insufficient guarantees on regulatory controls that already exist. His point was well put in an article by Andrew Phillips, a City solicitor. The article, written a year ago, was entitled:
Wanted: A sanitary squad for the Square Mile.
Speaking about the reforms he said:
In their place the Bank of England expects the new all-function colossi—increasingly foreign-owned—to erect invisible, or 'Chinese', walls of internal self-discipline. For a community which prides itself on hard-headed realism, such wishful thinking must be without precedent. Straight dealing is being sacrificed to competition; the national interest to capital gain.
Much of the thrust of that article has been reinforced and strengthened by recent events.
What can now be done to try to clean up some of the practices that have been uncovered? As for tightening up the definitions, in a takeover the bidder defines his own insiders. If a leak then occurs and is not traced, all the insiders are collectively liable. However, the problems connected with this kind of scheme are quite immense. How could such a definition be put into practice? How wide would the net be cast? It may lead to over-reaction; it may provide far too big a solution to what is, nevertheless, a significant problem.
The suggestion has also been made recently that ill-gotten gains should be retrieved, as happens now to the ill-gotten gains of fraudsters and of those who traffic in drugs. It is an attractive option that the Government ought to examine.
Hon. Members on both sides of the House have said that insider dealing must be shown clearly to be fraud and that it should be treated as fraud. Parliament must make its contribution by making it absolutely clear that it

deplores insider dealing. As for treating it as straightforward theft, I agree that spectacular prosecutions and gaol sentences would have the effect of concentrating the minds of those who are involved in such practices, or who might feel tempted to become involved in such practices.
I welcome the recent developments and the efforts of the Government and the Department of Trade and Industry to introduce more draconian powers. Nevertheless, a considerable sense of unease is beginning to surface in Great Britain about what is being regarded more and more as the casino-like morality of the City of London, and it is being compared with other injustices elsewhere in the country. The Government ought to act by making it abundantly clear tonight that they intend to act decisively. If they act decisively, they will do not only themselves but all of us a favour, not least the City of London.

Mr. Dennis Skinner: This debate is about capitalism. It is about the very nature of the beast—greed and materialism. We cannot avoid an examination of the cause of all these problems.
I do not believe for a moment that the Minister, who is connected with Lloyd's, will manage to avoid all the pitfalls into which previous Ministers have fallen. They tried to deal with the City by introducing banking Bills and companies Acts to get rid of the City crooks who are at work in their gambling dens trying to make as much money as they possibly can. Of course, they are carrying out the Prime Minister's principles, because she has called for an entrepreneurial society.
The Prime Minister says that she wants an entrepreneurial society in which everybody stands on their own two feet. That means, literally, standing on somebody else's neck. It also means that one has to get rich quick. That is one of the reasons why the Government are involved in a massive campaign to sell off British Gas. That is part of this Government's entrepreneurial ideas. The television advertisements about Sid, which cost £20 million, are really about insider dealing. They proclaim, "Where is Sid? Tell him." The Minister is trying to eradicate insider dealing, yet nearly every public hoarding in the country carries an advertisement about insider dealing that relates to Sid and British Gas.

Mr. Hoyle: Is my hon. Friend sure, from the way that the Minister has behaved, that he is not Sid?

Mr. Skinner: He could be, although many people might qualify to be Sid, in the avaricious, materialistic sense, in front of the hon. and learned Gentleman, because he is not a Cabinet Minister.

Mr. Hoyle: He is aiming for it.

Mr. Skinner: Yes, he is.
Nine Cabinet Ministers deal in shares, according to the information, which is new since the war. It is well-known that the Prime Minister was dealing in shares during the pit strike, and made several thousand pounds profit in a company that had a coal mining subsidiary in Australia. Some insider dealing went on there. She was causing a coal strike and the subsidiary was making money by sending coal to Britain, which was short of coal. The Prime Minister was making money out of shares, and that was insider dealing on a grand scale.

Mr. William Cash: The hon. Gentleman made a number of serious accusations, one of which was directed to my hon. and learned Friend the Under-Secretary of State, with respect to his position on insider dealing. Will the hon. Gentleman accept that the moment the opportunity arose under the Financial Services Act—I had the good fortune to serve on the Committee on the Bill—my hon. and learned Friend immediately took action not only on the Collier case but on the most recent one, Guinness? The hon. Gentleman is known to be interested in cricket. I ask him to play fair.

Mr. Skinner: Before I come to that, I must deal with the Secretary of State for the Environment. When he was Secretary of State for Transport he had shares in Jaguar. The Government decided to privatise Jaguar. This is well known, as I have said outside, so it is not in dispute. As a Minister with shares in that company, he privatised it with the help of his Tory friends on the Back Benches, 200 of whom happen to be directors of companies and one in eight of whom is a member of Lloyd's—that gambling den in the city. He got them to walk through the Lobby to support the privatisation of Jaguar and made £4,000 profit. That is insider dealing.
In answer to the question put by the hon. Member for Stafford (Mr. Cash), I ask the Minister when he is going to feel the collar of the Secretary of State for the Environment and say to him, "What about that money you made? You had advance information that the Government were going to privatise Jaguar, but you got shares on the sly." That was revealed only after it was discovered that the Prime Minister had shares.
It is a scandal that a Tory Government with nine Cabinet Ministers making money out of shares should have the cheek to come along and say that they are doing a great job and are controlling insider dealing. I will never believe that, and I know that my hon. Friends will not either. Some 138,000 people have been done by the Government through the DHSS, but only five have been done in the City. There has been one famous case while the Government have been in power. Peter Cameron-Webb and Peter Dixon did the stock exchange for £39 million.

Mr. Cash: It was Lloyd's.

Mr. Skinner: It was Lloyd's. The hon. Gentleman is right. I thought I would see whether he was awake. I caught him. He would not be much good at insider dealing, because he is too slow.
Peter Cameron-Webb and Peter Dixon got £39 million, and now they are in America. They have got big palatial places, and swimming pools to go with them, but nobody comes from the fraud squad and says, "Hello there, Mr. Peter Cameron-Webb, you have just done the City of London for £39 million. There are people in Britain called the electorate who are very concerned about double standards that operate when 138,000 people have been done by the DHSS for minor offences and little old women have been done for taking a tin of salmon out of Marks and Spencers." What kind of society is this? Nobody has been across to the United States to see these men.
Why is not somebody going from the fraud squad? The Government reckon that they have invested in the police. That is one of the mighty claims that they have made during the past seven years. They say that they have given the police more power and money and there are more of them, but one cannot be found to go across to the United

States to do his duty so that the British electorate know that the Government are prepared to deal with them as they deal with those who have to live below the poverty line.
The truth is that the Government have no intention of doing anything with those in the City because most of them come out of the same belly of the establishment as Conservative Members. More than 200 of them are directors in companies, many of them in insurance companies and banks. Where does one expect their allegiance to be? Of course they are in support of self-regulation. They do not want the Government to intervene and introduce laws that will make these people toe the line. They are in business to make money for those companies and to line their pockets and provide cash to the tune of £10 million or £20 million to finance the Tory party's election campaign. That is what they are in business for.

Mr. Hoyle: My hon. Friend has rightly said that many Conservative Back Benchers have directorships. Should they not declare their interests when they speak? Not one of them has done so yet.

Mr. Skinner: Last week, in the debate about Hangers, the artificial limb factory where 300 people have been sacked by a Tory company, allied to a South African company that will be trying to take over Pilkingtons—the case to which my hon. Friend referred—I heard a Tory Member of Parliament declare his interest.

Mr. Hoyle: You did not.

Mr. Skinner: Yes, I did. It is not a normal practice, although more than 200 have directorships or consultancy positions. This one declared an interest. When I asked how much he made out of it, he replied, "Only £5,000."
The right hon. Member for Hertsmere (Mr. Parkinson) has not been out of government for more than four years, yet he has 10 directorships already, and 4·5 million people do not have jobs at all. The right hon. Gentleman is moonlighting on a grand scale. That should tell the story. He has those jobs to act as an insider dealer. Any textbook on politics will justify the arguments about Tory Members needing business interests by saying that it is necessary so that they can pass on information about what is going on in the House of Commons and in Parliament generally to their businesses. That is insider dealing.
Despite all that, Conservative Members are talking as though they will eliminate such practices. They might be able to make some mild amelioration on the way. The hon. Member for Chichester (Mr. Nelson) more or less said that. He made a few offers, but he was not completely confident about it. Until one eliminates the beast itself—the gambling den, the stock exchange, and the rest of it—one cannot get rid of insider dealing. However, it is our job to expose it as often as we can and to show where it is possible to change it.
The hon. Member for Stafford (Mr. Cash), who was dropping asleep, has gone. He has probably got a headache because he has been thinking too fast. He asked, "Why will you not be fair to my right hon. and hon. Friends? They are having a debate about the issue; they have responded." Why have the Government done something about Guinness? The answer stares us in the face. It is because this debate is taking place. What is more, there is a little bit of a fracas in Australia. They want to get the headlines and eliminate the unseemly business that


is taking place in the law courts with Mr. Peter Wright. In fact, Peter Wright is an insider dealer. Several years ago he gave information to Chapman Pincher to write the book. The Government are now spending lots of money, twisting Robert Armstrong's arm and buffeting the Attorney-General from pillar to post because an insider dealer is now blurting out the truth that he blurted out several years ago when he made about £30,000. The whole thing is nonsense.
I am worried about insider dealing, the casino economy and double standards in Britain. Yesterday I met another of our casualties who has been savagely treated by the law courts acting on behalf of the Government. I refer to Fred Jones. He is not an insider dealer. He is an 84-year-old pensioner. He is on the other side of the tracks. He has probably never been to the City of London. All he wanted was a free television licence, such as those held by many pensioners in Britain who live in warden accommodation, homes for the disabled, and so on. He has launched a campaign for a free television licence. What happened? Under the so-called British law that is fair to all people in this land, Fred Jones did not have sanctuary. He did not have the opportunity to get away and ask a lawyer and a chartered accountant to talk it through for him. No, he finished up in gaol. The man is sound, he is still campaigning and the Government still have a problem with him.
When the Minister talks almost contemptibly about the way in which the law is fair, he should remember the Fred Joneses of this world. There is no self-regulation for Fred Jones. He was not able to say, "I have a group of people who will listen to my case and then perhaps make a recommendation to the Government that they should not take the matter to court." Oh, no, not for him. He has not got the ring fence of the Securities and Investment Board around him. Fred Jones bumps into the law head-on because he has not paid his £58. Today the Minister tried to apologise because the Government have managed to get only five people into the net from amongst all the crooks in the City.
A man in my constituency got notice to quit because he owed five weeks' rent. The estate agents, A. E. Holders of Mansfield, took him to court. I told the estate agents I was going to mention this. Mr. Bruin does not have a penny piece. There is no self-regulation for Mr. Bruin. He goes before the court on 16 December. The estate agents will try to take possesson of his home. Even if he gets away with it and his rent and arrears are paid, the law will almost certainly say, "We will not give you notice to quit, but we will put the court costs on your rent book." That could be about £100 or more. That is self-regulation, is it not?
It is interesting that during this Parliament and the one before there was no self-regulation for trade unions. We had Bill after Bill from Ministers, including the chairman of the Tory party. They said, "We have to stop this business of self-regulation for trade unions. We have to control them and make sure that they have a ballot for everything they do." That applies except when they want to stop them striking. They are not keen on ballots then, because they want them to get back to work as quickly as possible. They said there should be ballots for strikes, executives and general secretaries. Woe betide there being one little branch of the trade union which has not complied

with the law. All hell is let loose. There are questions in the House, and nine times out of ten they have to have another ballot. There is no self-regulation for trade unions.
The Government have the cheek to talk about no having double standards. Of course there are double standards. The reason why money has been made in the City in recent years to a greater extent than before is quite simple: the interest rates have been in double figures for every year that the Government have been in office. If one is in the City one cannot afford not to make money out of somebody else's money.
Why put money into a small engineering factory or into the Grantham cafe? The cafe has gone bankrupt. There are 150,000 bankruptcies in the industrial economy while the casino economy is blazing away in the City. We had an entrepreneur in Grantham who said, "I'll follow the Prime Minister. She has asked us to be entrepreneurs. I'll change the little shop where she used to live, where she used to put an extra penny on the bacon and butter when she served behind the counter." There used to be a post office inside. That was never talked about because it was part of the public sector. That was kept in the dark. That entrepreneur turned the shop into a cafe, in line with the entrepreneurial society. What happened? It is now one of the 150,000 bankruptcy casualties in Britain. I wonder whether that entrepreneur would have liked a bit of self-regulation before he went bankrupt. I wonder whether he yearned for the moment when he could have operated, as they do on the stock exchange, and gone to somebody and said, "Will you look into my case to see whether it is possible to stop it going to the Government and stop me having to file for company liquidation?" That is Thatcher's Britain. That is the society we are living in today.
Nobody should imagine that we have heard the last of the credit card and casino economy. In 1986, £27 billion is owed on credit cards. Seventy per cent. of the residual income of the average family in Britain, all of us, is owed in debts before the pay packet is opened. It was 45 per cent. in 1979. It has now gone up to 70 per cent. and over and it is still growing.
Tory Members talk about insider trading and self-regulation. There is a bigger problem around the corner. It has all come about because they have concentrated on allowing the City to make money out of the high interest rates, while the industrial economy has gone to the dogs. Have they cared as throughout the length and breadth of Britain engineering factories have closed down because of lack of investment and pits have been closed because of the Government's policies? Banks have been saved. They have saved banks, such as Johnson Matthey, which had no money and no reserves. I have to mention that because they want to hear it in the Galleries.
JMB was an uneconomic unit of production, but the Government saved it. In fact, the Chancellor of the Exchequer rang the Prime Minister on 30 September 1984 and said, "JMB has got no reserves." The Prime Minister said, "You know what to do when it has no reserves; you shut it." The Chancellor said, "It is not a pit; it's a bank." The Prime Minister then said, "Save it." Of course, it is part of the casino economy. The Chancellor said, "What shall I save it with?" The Prime Minister said, "Save it with £100 million of taxpayers' money." Just think what we could have done with that money in the shipyards on the Tyne and elsewhere, in the coalfields and in the engineering and steel industries.
It is all double standards. Here we are today talking about self-regulation. We are talking about self-regulation for Tory Members and people in the City. Imagine what would happen if a bloke in a betting shop got done for insider trading. A betting shop is much the same as the stock exchange—that posh gambling den. Just imagine somebody coming along and saying, "Well, I do not think you should prosecute old Jack. He only backed five winners after they had all come in." Insider dealing. I rest my case.

Sir Brandon Rhys Williams: I would not attempt to speak with the brilliance and grasp demonstrated by the hon. Member for Bolsover (Mr. Skinner), partly because I have never worked in the City and I have not had sufficient opportunity to observe what goes on there. The hon. Gentleman evidently has had that Opportunity, and it has inspired his speech.
May I first declare my interests. I own no shares in any public company, I am not a director of any public company, I am not a member of Lloyds, I take no retainers, I am not a paid consultant, I am not a member of a trade union and I am not seeking office in the Government.
Many of my constituents in Kensington earn their livings in occupations which, directly or indirectly, contribute to the success of the City. The vast majority of them do not earn six-figure incomes or, many of them, even five-figure incomes. I am speaking of men as well as women, who go into the City each day to make their contributions. They are certainly not gamblers. They pay their taxes like everyone else. We need to bear in mind the fact that the City is a large institution in this country and an enormous contributor to the success of the British economy.
My voters do not welcome the suggestion that the City is a crookedly operated casino or a haven for corner cutters and irresponsible adventurers. No doubt some such people exist in the City, just as they exist in political circles—it is unavoidable. We have to bear in mind that all types of people are attracted to the work of the City, and sometimes things will go wrong.
The British economy needs the City to be successful, just as the City needs a flourishing British economy if it is to continue as one of the world's greatest financial centres. The City has not abandoned the traditions which made it a world financial centre, but shadows are over it at the present time. That is a matter of concern to all hon. Members. The City has the appearance of Versailles some 200 years ago, when it still had time to avert a disastrous clash with public opinion. It was a brilliant, powerful and glittering centre—like the City is now—a centre of ideas and influence. The leaders in Versailles did not recognise the danger they were in. If they did, they did not exert themselves to correct the drift from responsible public opinion while they still had time.
There is a danger that not enough people in the city today are prepared to speak out plainly for the old standards. I hope that the leaders of the City's institutions will recognise the urgent need to insist on the highest standards of conduct in small and large transactions. The principal responsibility for maintaining standards lies within the square mile, not in Whitehall or Westminster.
Politicians are unlikely to have the relevant experience to justify taking power to interfere in the management of

markets or the control of investment policy. The same is likely to apply to their permanent officials as well. The Government should not rely only on the Financial Services Act 1986. The Financial Services Act represented a tremendous endeavour by the Department to put a new structure of conduct into place in statutory form. We all have to pay tribute to the Minister, in particular, for his hard work in bringing that Act to its successful conclusion. But there are measures now which the Government, and only the Government, can take, to produce a more responsible and more fruitful climate in the disposal and control of capital assets.
I shall briefly list a series of points and make some recommendations for the Ministers to consider. Over 100 cases of suspected insider trading have been referred to the Department, only a handful of which have resulted in prosecutions since the 1980 Act came into force. When the stock exchange was solely responsible for its own discipline, a number of cases of insider trading that were detected probably never came to light before the general public. The stock exchange had a more successful record in maintaining the highest standards than the Department has so far achieved since it was granted power to intervene.
The recent tremendous pressure towards the corporate restructuring of British industry has provided spectacular opportunities for quick capital gains. Perhaps that was inevitable. It does not mean that the reorganisation of industry, which has taken place in recent years and is still continuing, is necessarily wrong.
For some 14 years, I served in ICI. Everybody in that company—certainly when I served in it—knew the importance of the measure which took place in 1926, when a great capitalist and adventurer, Harry McGowan, had the foresight to realise that the British chemical industry had to be totally restructured if it was to survive. Had it not been for Harry McGowan's foresight in creating the merger of the major British chemical companies in 1926, we would not have an industry today with anything like the importance it has.
There is a serious need for much closer liaison and better understanding between large investors and the senior management of British industry. The CBI is perfectly right to call for it. The Government should look for measures that would encourage closer liaison and understanding between the DTI in particular, the City and the senior management of British industry. Such liaison and understanding are possible without partial disclosure of confidential information.
There is also an urgent need to lengthen the time span of investment discretion. The Government must accept some responsibility in this matter. It is not outside the Government's ability to influence the events that investors have to take into account when they make long-term decisions about the disposal and organisation of capital assets. Changes in taxation policy could be made which would encourage the revival of fixed interest and preference shares as a source of corporate finance. For too long we have been living in the age of the equity. It has brought an element of doubt, just as it has brought an element of discretion, into the way that dividend policies are likely to operate. Now that conditions for the long-term expectations of the value of the currency have been restored, we should try to revive the fixed interest and preference share sectors of the market which played an important part in the financing of British industry before the war.
I have spoken about this matter before, but I do not seem to have made any progress with Treasury officials. They consider suggestions about reform of company taxation, and matters such as that, simply from the viewpoint of protecting the revenue. They do not realise that revenue would increase enormously if the health of the British economy could be improved. It is vital that we seek to lengthen the time span of investment discretion and create a climate in which there is less doubt about company policy in the payment of dividends from year to year. It is unhealthy speculation and pressure on boards to change their dividend policies in response to very short-term market forces which cause a great deal of the anxiety and uncertainty in boardrooms, and resultant timidity in splashing out and making big investment decisions.
I have referred before to something that I regard as the historic compromise. It is happening on its own and is beginning to take shape. This is the historic compromise under which, increasingly, shareholders will give up their right to an equity dividend and workers will give up the right to strike. This is a coming together of the two sides of industry. It is inevitable, and it is happening, whether or not the Government encourage it.
There is a need for much greater transparency and predictability in financial decision-making; this is also a matter for Treasury policy.
We shall have to move quickly towards establishing a more stable relationship between exchange rates, especially those of sterling and other Common Market currencies. As I have said before, I entirely support my right hon. Friend the Prime Minister in her resistance to announcing that we have joined the exchange rate mechanism of the European monetary system. However, we should make our target—and we should be taking positive steps now to achieve it—the creation of a currency union within the Common Market. There is no reason why that should be regarded as a long-term objective. There are measures which we could take at once that would encourage the markets in the expectation that the major currencies of the Common Market will be brought closer together and will stay closely together in future years. There is nothing that would help British industry more in planning long-term investment decisions and the responsible structure of corporate finance than the feeling that this country's future in the Common Market can be placed on a long-term and predictable basis.
The Department of Trade and Industry should be less preoccupied with immediate instances of crime and fraud, however scandalous they are and however high the headlines in the daily press. The Department should consider the way in which company law operates in regard to the responsibility of the supervisory elements in our financial, industrial and business institutions. It should consider the conditions in which management is able to become slack without even being aware of its shortcomings, in which shareholders are powerless to intervene when they begin to feel anxious about management's efficiency and in which auditors are uncertain of their duties and loyalties. The tone of business may become so slack and lacking in supervisory discretion that opportunities arise for people to begin with small frauds or minor cheating decisions and go on to major frauds, many of which are not discovered.
I learned when talking informally some time ago to officers of the fraud squad that in all too many cases, when fraud is suspected or even proved, the auditors are already aware of what is happening but do not think that it is their responsibility or that it is in the interest of their firm to do anything about it. The auditing profession is not certain to whom it is responsible. Are auditors responsible to the shareholders, as was originally conceived, over the directors' heads or are they responsible to the directors, so that they are obliged to connive with the directors in policies that are dubious or even contrary to law? Auditing firms face a difficult decision. Junior officials in those firms may notice highly dubious activities which, for personal or policy reasons, they think it would be better to say nothing about; so instead they simply close the lines of investigation which would bring discipline to bear on those who are breaking the rules.
Top management should not conduct its business without accurate, up-to-date information provided on a professional basis. When I was involved in consultancy, I knew of all too many companies in which some senior people were aware of critical information about the company's future, marketing prospects, and so on but others, who should have had that information, were not. All too often, non-executive directors would go to the board to express their anxieties but would find themselves floored by the arguments of the full-time directors simply because they had not been provided with the data to enable them to press their point. A small change in the rules governing the circulation of data in companies is needed to ensure that confidential data go to those who should have it but not to those who can use it wrongly, have no need of it and may be offered temptation by it.
One cannot tell British management in the City, in industry or in business that it must be honest and that laws will be passed to force people to be honest. Human nature is such that some people will always be willing to break the rules. We cannot pass laws that tell people that they must be efficient. To do so would be futile. But I implore my right hon. and hon. Friends to realise that we can create statutory routines that make it normal practice in the vast majority of companies for all concerned to act in such a way that opportunities to commit fraud do not arise.
Of course mistakes will be made; but British company law used to be held up as an example to the world of the way in which private enterprise should be regulated. I do not think now that anyone would look to British company law, in its present state—even if he had the patience to read our vast and wordy statutes—for a model of how private enterprise should conduct itself. The original model, which I suppose was a Gladstonian one, was an exceedingly well-conceived balance between the powers of shareholders, the responsibilities of the auditors—when the audit was made statutory near the end of the 19th century—the duties of management and the rights of workers and others.
Those aspects can be put right, but the flood of company legislation in recent years has not brought into focus the necessity for simple statutory routines that strengthen the hands of the non-executive directors and especially the supervisory role of the auditors. That aim does not require a tremendous upheaval in procedure. It is simply a matter of bringing up to date procedures which were put in place in our company law 50 or 100 years ago and which are now falling into disuse or are simply neglected.
I shall cite one example which gives us an insight into the way in which the Securities and Exchange Commission works in the United States. Because there is a separate company law in every state, it is not possible for the SEC to introduce changes in the law that will result in changes in the way in which companies manage their affairs. In recent years, the practice has been for the SEC to bring pressure to bear on the stock exchanges in the United States to alter their listing agreements so that companies could not have their shares quoted unless they operated certain routines which the SEC thought necessary for the good conduct of business. The New York stock exchange in particular was, I believe, the first to introduce the rule that the shares of a company could not be quoted unless the company established an audit committee. Of course, that was a controversial development, but it was not all that difficult to introduce it in the context of American company practice. In the United States, the majority of companies are primarily run by non-executive directors, and the executive heads on the boards tend not to be in an overwhelming position, unlike their counterparts in the majority of British companies.
The liaison which that rule brings about between the auditors and the company directors has been put on a formal basis. In Britain, almost invariably, experts on company practice—and on the future of the auditing profession in particular—will say that it would be an excellent idea if the practice of appointing audit committees were adopted in this country. Some limited steps have been taken in that direction but, unless there is a statutory push to bring it about, or unless the stock exchange in London decides to make it one of its listing conditions, another 10 years will go by and the auditors will still not be in a position to exercise the appropriate degree of supervision over company management.
I have introduced a companies Bill in every Session since 1969. In recent years, I have regularly made recommendations as to the way in which we could strengthen the hands of the auditors and of the non-executive directors, improve the circulation of data, and so on. Since 1974, because of the intervention of the Department of Trade and Industry, I have not been able even to get my Bill considered by a Standing Committee. The Department's policy of blocking discussion in Parliament of my proposals can now be seen to have been a mistake. I hope that this year, when I again introduce such a Bill, the Department will not intervene to prevent the House from taking by Bill into Committee.

Mr. Alan Williams: There should have been a Division when my hon. Friend the Member for Bolsover (Mr. Skinner) finished his speech, since after that, all that was left to those of us who remained was to contribute to a state of creative anti-climax. I congratulate my hon. Friend on a speech of, if I may say so, unusual comprehensiveness. It should be the answer to anyone who doubts the elasticity of the rules of procedure of the House.
The Minister sceptically asked why we wanted this debate now. Since he does not seem to trust our motives, I shall refer to the Financial Times. It said:
There have never been so many opportunities to make illegal profits in the United Kingdom stock market by using inside information about a company's financial performance or its takeover strategy.

And it has never been easier for the directors of a company, its merchant bankers, lawyers or accountants, to get away with it.
That is why we are having this debate. We are talking about crime on a massive and unprecedented scale in this country; crime on such a scale that it makes the great train robbers look like back-street pickpockets. We are dealing with greed and avarice on an unprecedented scale, far beyond the comprehension of most of us.
We are also talking about sums of money that are beyond the comprehension of most of us. Yet in a way, that gives the lie to the pretensions of so much of the Conservative party's strategy. The Conservative party said that tax cuts motivated people. We are talking about the people who have been the beneficiaries of £3 billion a year of tax cuts. The Government gave those tax cuts to people on top incomes. We are talking about a group of people who, in many cases, have seen more than a doubling of their salaries within the past 12 months. To them, everything has come. Despite all of that, they still cannot keep snouts out of troughs. That is the shabby truth of the position that we are investigating.
There is nothing glittering about that aspect of the City. I am sure, as hon. Members on both sides have said, that the City feels no pride in those activities. We are talking about the quick buck morality. Let there be no doubt that this Government have contributed to that philosophy. It is innate in their thinking, in their concept of privatisation and in their concept of pop capitalism.
On the one hand the Prime Minister stands at the Dispatch Box and berates workers for a 5 per cent. a year pay rise, and on the other hand she eulogises about the success of the launch of British Telecom with a 100 per cent. capital gain for those who happened to win a place in the lottery. That is the sort of ambiguity and ambivalence, the undermining of social and moral values, to which the basic political tenets of the Conservative party have contributed. The lesson that is getting through to many young people who cannot even find a job—the lesson of the British Gas launch, the British Telecom launch, the TSB launch—is that it is easier to work the system than to work a machine. In their motion the Government eulogise the actions of the City; a City which has exported about as much capital from Britain as the Government have received in revenue from the North sea during the entire time that they have been in office.
The Government praise the City for its work in support of industry. The Minister got into some slight difficulty earlier because of a basic conflict between the aspirations of the City and the needs of industry. The Minister shakes his head, but he must be about the only person in Britain who does not understand that conflict. The City is motivated by a quick rate of return. Industry desperately needs long-term investment in plant and machinery, and in research and development. Yet firm after firm says that it must be careful about its investment and research and development programmes, because if it puts too much into those areas and too much into the seed corn of their industries, they line themselves up for takeover by the City. The Minister got into a slight predicament over investment made in industry during his time in office, which has been a time of unprecedented boom in the City's activities. He wanted to dismiss the protestation that investment had fallen during the last quarter. The Minister said, "Oh no, you must not take just a quarter into account. You must look at progress in the City and


industry over a much longer time scale." But when we tried to examine progress over the entire lifespan of the Government, the Minister did not want that examined either. He is a singularly difficult man to please, much as we try.
During the past few years, especially the last two years, the City's role has been predominantly predatory and parasitic. It has incited, with the support of the Government, the merger mania that has led to the enormous, illicit profitability of insider dealing. The figure of £30,000 million has been given for this year alone, which is five times higher than last year. That is why we are having this debate now. Opportunities to make killings exist on an unprecedented scale. It is clear that there is little or no industrial logic in so many of the mergers that are taking place. They are related far more to a quick financial kill than to any industrial logic or any attempt to structure our manufacturing industry more efficiently. The Government, with their friends in the City, have created a paradise for insiders. That is why it is interesting to note the statistical evidence that between 75 and 80 per cent. of all suspected insider deals have occurred in the context of takeover bids. They have all occurred during the build-up to the takeover.
My hon. Friend the Member for Livingston (Mr. Cook) referred to Acquisitions Monthly and the evidence that it gave of a 25 per cent. average share rise in the three months prior to the takeover of a company. As my hon. Friend said, the figure is as high as 80 per cent. That is why the opportunity is so massive for those who have inside information. The editor of that magazine—

Mr. Tim Smith: rose—

Mr. Williams: I shall not give way, as I am limited on time.
The editor of the monthly magazine is quoted in The Guardian as saying that financial deals are now worth hundreds of millions of pounds. We are not talking about small sums of money. The sums about which we have been hearing recently in one or two cases are derisory by comparion with what has really been going on.
We have heard about the virtues of self-regulation. If it is so virtuous, one is bound to wonder whey we are having any investigation so late into the activities of Guinness in relation to Bells or Distillers. The ultimate in complacency is a statement made to The Guardian in June last year:
We all work in a price-sensitive world and are well trained to keep our traps shut.
That was a quotation from a City spokesman who works in Morgan Grenfell, the company whose activities are attracting attention at present.
The Minister cannot pretend that those are occasional lapses or occasional indiscretions. The structures that exist to conceal and support those activities, such as the offshore companies, are evidence of the way in which the position has been conspired at over the years. It is only the minnows who are caught. We have heard that 110 cases have been referred by the Stock Exchange Council to the Department of Trade and Industry. Of those, nine led to prosecutions and six to convictions.
As the stock exchange said, five of them were "small fry". The big men in those deals are already well protected and covered. It is the naive and the novices who tend to be caught.
The Government have contributed to the peculiar new morality of people's capitalism by the way in which they have dealt with privatisation. As has been pointed out, thousands of multiple applications were made during the BT launch. Shortly after that launch, Kleinwort Benson warned that action for fraud would be taken against those making multiple applications. Where are those prosecutions? There are 7,000 multiple applications on record, not counting those that were not found. Where are those threatened prosecutions, and who has been prosecuted over the 6,000 such deals in relation to the Trustee Savings Bank?
The Minister said that the Government regarded insider dealing as being pernicious to markets. He then described it as a pernicious offence. No hon. Member would deny that it damages the City's standing; nor would the City deny it. But having passed a law in June 1980 for which the Minister claims credit, the Government sat back for the next six years and ignored their own law. They then feign surprise when others follow their example. Small wonder that the financial page of The Guardian said that the Department of Trade and Industry was
a bit like a black hole when it comes to dealing with insider trading cases. Dozen of cases go in, but nothing comes out.
Our indictment of the Government is that the present situation is clearly the direct consequence of years of their own indolence and indifference.

Mr. Howard: The right hon. Member for Swansea, West (Mr. Williams) and several other hon. Members suggested that certain developments in the City might increase the incidence of insider dealing. That may be so, but two factors may work substantially to decrease the incidence of insider dealing.
The first is the amount of information that is becoming available, along with the new technology in the market place, which will shed even more light on suspicious movements in share prices and suspicious patterns in share dealings and make it easier for the regulatory authorities to identify and detect insider dealing.
The second is that powers have now been in effect for two weeks or so which, it was admitted during the passage of the Financial Services Bill, are draconian and sweeping. They should enable us, as never before, to detect, investigate and punish instances of that offence when and where they occur.
One remarkable feature of the debate is that neither of the Opposition Front Bench spokesmen suggested an additional power that should be added to the battery of powers available to us in order to deal with this mischief. However, Back Benchers have made suggestions, and I shall use the few remaining minutes to deal with some of them.
The first hon. Member to make any constructive suggestion was the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore). He made two suggestions. I pay tribute to him, incidentally, because he recognised the difficulties involved in pinning down, with sufficient evidence, what is needed to establish the criminal burden of proof in such matters. That is a difficulty, and that is why we have taken these additional powers.
The first suggestion of the hon. Member for Hackney, South and Shoreditch was that own-account dealing should be banned by those involved in the City. The second suggestion was that further steps should be taken to try to identify the beneficial ownership of certain shares and investment companies.
The first suggestion deserves to be treated seriously. However, I agree with my hon. Friend the Member for Chichester (Mr. Nelson) that it would not work. We do not need more rules, because we have the criminal law and the power to bring people to book. If people are prepared to break the criminal law, nothing would be achieved by introducing more rules that would not have the force of the criminal law in an attempt to bring them to book.
The hon. Member for Hackney, South and Shoreditch referred to identifying the beneficial ownership of certain shares and investment companies. A good deal can be done, and we have already taken additional powers in response to the amendment moved in Committee by my hon. Friend the Member for Suffolk, South (Mr. Yeo). They will go a long way towards enabling us to track down those who have the beneficial ownership of shares and are responsible for dealings.
My hon. Friend the Member for Beaconsfield (Mr. Smith) asked a question about resources. They should not be a constraint in the investigation of such cases. On 10 January 1986 the then Secretary of State announced a substantial increase in the amount of resources devoted by the Department to countering fraud. Indeed, 195 new posts are being created over a two-year period in those parts of the Department dealing with investigation and prosecution work. The extra staff will be available, if required, to assist with insider dealing investigations under the Financial Services Act 1986. In addition, we now have the power, recently used, to appoint external inspectors with wide-ranging powers to investigate insider dealings.
My right hon. Friend the Member for Beaconsfield also mooted the possibility of introducing a civil offence of insider dealing. I doubt whether that would substantially increase the efficacy of the powers available to us. I believe that the criminal nature of the offence now on the statute book and the possibility of imprisonment as a punishment for it represents the greatest possible deterrent. I do not believe that anyone would want to contemplate imprisonment without the satisfaction of the criminal burden of proof.
As I have said, we have gone a long way towards modifying the normal standards of the criminal law and substantially eliminating the right of silence in order to do all that we can to increase the prospect of effective enforcement of the criminal law.
My hon. Friend the Member for Chichester made two points. The first point was argued at considerable length in Committee on the Financial Services Bill. He asked for the powers to be capable of transfer to the SIB. He did not persuade me of the importance of necessity of that step during the passage of that Bill, and I fear that he has not persuaded me tonight. These draconian powers need to be exercised by an authority that is directly accountable to the House. That is why it is important that they should be retained by the Secretary of State.
However, I agree with my hon. Friend the Member for Chichester about the importance of international co-operation. This is a most important matter. Although we have made a useful start, I freely recognise that more needs to be done. Information is the key to progress. That is why

the sharing of information is at the heart of the memorandum of understanding that my right hon. Friend the Secretary of State recently signed with the SEC and the Commodities Futures Trading Commission in the United States. We hope to build on that start in international co-operation.
To that end, we shall hold a conference next week in this country which will be attended by the regulators of most of the important countries in the world which have big financial centres. We shall be seeking to make substantial progress with them in extending international co-operation. Insider dealing will be high on the agenda at that conference. I am delighted to say that the Swiss have accepted an invitation to attend the conference. We shall be putting our concerns to them and seeking to obtain their co-operation in dealing with abuses and taking effective action.
As I have said, both sides of the House agree that insider dealing is harmful and unfair and ought to be stamped out. The Opposition have been careful not to claim that they could eradicate it completely. No system of regulation could prevent fraud completely, but there can be no doubt whatever that the Government have acted to take the powers which are necessary to deal effectively with this mischief. Those powers have been put into effect. It is on that basis that I ask the House to support the amendment and to reject the Opposition motion.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 177, Noes 261.

Division No. 15]
[7 pm


AYES


Abse, Leo
Crowther, Stan


Adams, Allen (Paisley N)
Cunliffe, Lawrence


Alton, David
Cunningham, Dr John


Anderson, Donald
Davies, Rt Hon Denzil (L'lli)


Ashley, Rt Hon Jack
Davies, Ronald (Caerphilly)


Atkinson, N. (Tottenham)
Davis, Terry (B'ham, H'ge H'l)


Banks, Tony (Newham NW)
Deakins, Eric


Barnett, Guy
Dewar, Donald


Barron, Kevin
Dixon, Donald


Beckett, Mrs Margaret
Dobson, Frank


Bennett, A. (Dent'n &amp; Red'sh)
Dormand, Jack


Bermingham, Gerald
Duffy, A. E. P.


Bidwell, Sydney
Dunwoody, Hon Mrs G.


Blair, Anthony
Eadie, Alex


Boothroyd, Miss Betty
Eastham, Ken


Boyes, Roland
Evans, John (St. Helens N)


Bray, Dr Jeremy
Faulds, Andrew


Brown, Gordon (D'f'mline E)
Field, Frank (Birkenhead)


Brown, Hugh D. (Provan)
Fields, T. (L'pool Broad Gn)


Brown, N. (N'c'tle-u-Tyne E)
Flannery, Martin


Brown, Ron (E'burgh, Leith)
Foot, Rt Hon Michael


Buchan, Norman
Forrester, John


Caborn, Richard
Foster, Derek


Callaghan, Jim (Heyw'd &amp; M)
Foulkes, George


Campbell, Ian
Fraser, J. (Norwood)


Carlile, Alexander (Montg'y)
Freud, Clement


Carter-Jones, Lewis
Godman, Dr Norman


Cartwright, John
Golding, Mrs Llin


Clark, Dr David (S Shields)
Gould, Bryan


Clarke, Thomas
Gourlay, Harry


Clay, Robert
Hamilton, James (M'well N)


Clwyd, Mrs Ann
Hamilton, W. W. (Fife Central)


Cocks, Rt Hon M. (Bristol S)
Harrison, Rt Hon Walter


Cohen, Harry
Hattersley, Rt Hon Roy


Conlan, Bernard
Healey, Rt Hon Denis


Cook, Frank (Stockton North)
Heffer, Eric S.


Cook, Robin F. (Livingston)
Hogg, N. (C'nauld &amp; Kilsyth)


Corbett, Robin
Home Robertson, John


Corbyn, Jeremy
Howarth, George (Knowsley, N)


Craigen, J. M.
Howells, Geraint






Hoyle, Douglas
Pike, Peter


Hughes, Dr Mark (Durham)
Powell, Raymond (Ogmore)


Hughes, Roy (Newport East)
Prescott, John


Hughes, Sean (Knowsley S)
Radice, Giles


Janner, Hon Greville
Randall, Stuart


Jenkins, Rt Hon Roy (Hillh'd)
Raynsford, Nick


John, Brynmor
Redmond, Martin


Jones, Barry (Alyn &amp; Deeside)
Rees, Rt Hon M. (Leeds S)


Kaufman, Rt Hon Gerald
Richardson, Ms Jo


Kennedy, Charles
Roberts, Allan (Bootle)


Kirkwood, Archy
Robertson, George


Lambie, David
Rogers, Allan


Lamond, James
Rooker, J. W.


Leighton, Ronald
Ross, Ernest (Dundee W)


Lewis, Ron (Carlisle)
Rowlands, Ted


Lewis, Terence (Worsley)
Sedgemore, Brian


Litherland, Robert
Sheerman, Barry


Livsey, Richard
Sheldon, Rt Hon R.


Lofthouse, Geoffrey
Shore, Rt Hon Peter


Loyden, Edward
Short, Ms Clare (Ladywood)


McCartney, Hugh
Short, Mrs R.(W'hampt'n NE)


McDonald, Dr Oonagh
Silkin, Rt Hon J.


McKay, Allen (Penistone)
Skinner, Dennis


McKelvey, William
Smith, C.(Isl'ton S &amp; F'bury)


MacKenzie, Rt Hon Gregor
Smith, Cyril (Rochdale)


McNamara, Kevin
Smith, Rt Hon J. (M'ds E)


McTaggart, Robert
Spearing, Nigel


Madden, Max
Stott, Roger


Mallon, Seamus
Strang, Gavin


Marek, Dr John
Straw, Jack


Marshall, David (Shettleston)
Thomas, Dafydd (Merioneth)


Martin, Michael
Thomas, Dr R. (Carmarthen)


Maxton, John
Thompson, J. (Wansbeck)


Maynard, Miss Joan
Thorne, Stan (Preston)


Meacher, Michael
Tinn, James


Michie, William
Torney, Tom


Mikardo, Ian
Wainwright, R.


Millan, Rt Hon Bruce
Wardell, Gareth (Gower)


Mitchell, Austin (G't Grimsby)
Wareing, Robert


Morris, Rt Hon A. (W'shawe)
Weetch, Ken


Morris, Rt Hon J. (Aberavon)
White, James


Nellist, David
Wigley, Dafydd


Oakes, Rt Hon Gordon
Williams, Rt Hon A.


O'Brien, William
Winnick, David


O'Neill, Martin
Wrigglesworth, Ian


Orme, Rt Hon Stanley
Young, David (Bolton SE)


Park, George



Patchett, Terry
Tellers for the Ayes:


Pavitt, Laurie
Mr. Mark Fisher and


Pendry, Tom
Mr. Derek Fatchett.


Penhaligon, David



NOES


Adley, Robert
Bright, Graham


Aitken, Jonathan
Brinton, Tim


Alexander, Richard
Brittan, Rt Hon Leon


Alison, Rt Hon Michael
Brown, M. (Brigg &amp; Cl'thpes)


Ancram, Michael
Browne, John


Ashby, David
Bruinvels, Peter


Aspinwall, Jack
Buchanan-Smith, Rt Hon A.


Atkins, Robert (South Ribble)
Budgen, Nick


Atkinson, David (B'm'th E)
Bulmer, Esmond


Baker, Nicholas (Dorset N)
Butler, Rt Hon Sir Adam


Baldry, Tony
Butterfill, John


Banks, Robert (Harrogate)
Carlisle, John (Luton N)


Batiste, Spencer
Carlisle, Kenneth (Lincoln)


Beaumont-Dark, Anthony
Carttiss, Michael


Bendall, Vivian
Cash, William


Benyon, William
Chalker, Mrs Lynda


Best, Keith
Chapman, Sydney


Bevan, David Gilroy
Chope, Christopher


Biffen, Rt Hon John
Clark, Hon A. (Plym'th S'n)


Biggs-Davison, Sir John
Clark, Sir W. (Croydon S)


Bonsor, Sir Nicholas
Clarke, Rt Hon K. (Rushcliffe)


Boscawen, Hon Robert
Cockeram, Eric


Bottomley, Peter
Colvin, Michael


Bottomley, Mrs Virginia
Conway, Derek


Bowden, A. (Brighton K'to'n)
Coombs, Simon


Boyson, Dr Rhodes
Cope, John


Brandon-Bravo, Martin
Cormack, Patrick





Couchman, James
McCurley, Mrs Anna


Cranborne, Viscount
Macfarlane, Neil


Critchley, Julian
MacGregor, Rt Hon John


Crouch, David
MacKay, Andrew (Berkshire)


Currie, Mrs Edwina
MacKay, John (Argyll &amp; Bute)


Dickens, Geoffrey
Maclean, David John


Dicks, Terry
McLoughlin, Patrick


Dorrell, Stephen
McNair-Wilson, M. (N'bury)


Douglas-Hamilton, Lord J.
McNair-Wilson, P. (New F'st)


Dover, Den
McQuarrie, Albert


du Cann, Rt Hon Sir Edward
Madel, David


Durant, Tony
Major, John


Dykes, Hugh
Malins, Humfrey


Edwards, Rt Hon N. (P'broke)
Malone, Gerald


Eggar, Tim
Maples, John


Emery, Sir Peter
Mather, Carol


Evennett, David
Maude, Hon Francis


Farr, Sir John
Mawhinney, Dr Brian


Favell, Anthony
Maxwell-Hyslop, Robin


Fletcher, Alexander
Mayhew, Sir Patrick


Fookes, Miss Janet
Meyer, Sir Anthony


Forman, Nigel
Miller, Hal (B'grove)


Forsyth, Michael (Stirling)
Mills, Sir Peter (West Devon)


Forth, Eric
Miscampbell, Norman


Fowler, Rt Hon Norman
Mitchell, David (Hants NW)


Fox, Sir Marcus
Montgomery, Sir Fergus


Franks, Cecil
Morrison, Hon C. (Devizes)


Fraser, Peter (Angus East)
Morrison, Hon P. (Chester)


Gale, Roger
Moynihan, Hon C.


Garel-Jones, Tristan
Mudd, David


Glyn, Dr Alan
Neale, Gerrard


Goodhart, Sir Philip
Nelson, Anthony


Goodlad, Alastair
Neubert, Michael


Gow, Ian
Nicholls, Patrick


Gower, Sir Raymond
Onslow, Cranley


Greenway, Harry
Oppenheim, Phillip


Gregory, Conal
Oppenheim, Rt Hon Mrs S.


Grylls, Michael
Ottaway, Richard


Gummer, Rt Hon John S
Page, Richard (Herts SW)


Hamilton, Neil (Tatton)
Parkinson, Rt Hon Cecil


Harris, David
Patten, Christopher (Bath)


Haselhurst, Alan
Patten, J. (Oxf W &amp; Abgdn)


Hawksley, Warren
Pawsey, James


Hayhoe, Rt Hon Barney
Peacock, Mrs Elizabeth


Hayward, Robert
Percival, Rt Hon Sir Ian


Heath, Rt Hon Edward
Pollock, Alexander


Heathcoat-Amory, David
Porter, Barry


Heddle, John
Portillo, Michael


Henderson, Barry
Powell, William (Corby)


Heseltine, Rt Hon Michael
Powley, John


Hickmet, Richard
Price, Sir David


Hicks, Robert
Proctor, K. Harvey


Higgins, Rt Hon Terence L.
Raffan, Keith


Hind, Kenneth
Raison, Rt Hon Timothy


Hirst, Michael
Rathbone, Tim


Holland, Sir Philip (Gedling)
Renton, Tim


Hordern, Sir Peter
Rhodes James, Robert


Howard, Michael
Rhys Williams, Sir Brandon


Howarth, Alan (Stratf'd-on-A)
Ridley, Rt Hon Nicholas


Howell, Rt Hon D. (G'ldford)
Ridsdale, Sir Julian


Hunt, David (Wirral W)
Rifkind, Rt Hon Malcolm


Hunter, Andrew
Rippon, Rt Hon Geoffrey


Irving, Charles
Roberts, Wyn (Conwy)


Jenkin, Rt Hon Patrick
Robinson, Mark (N'port W)


Johnson Smith, Sir Geoffrey
Roe, Mrs Marion


Knight, Greg (Derby N)
Rossi, Sir Hugh


Knowles, Michael
Rost, Peter


Lang, Ian
Rowe, Andrew


Latham, Michael
Sackville, Hon Thomas


Lawler, Geoffrey
Sainsbury, Hon Timothy


Lawrence, Ivan
St. John-Stevas, Rt Hon N.


Lee, John (Pendle)
Sayeed, Jonathan


Lennox-Boyd, Hon Mark
Shaw, Giles (Pudsey)


Lewis, Sir Kenneth (Stamf'd)
Shaw, Sir Michael (Scarb')


Lilley, Peter
Shelton, William (Streatham)


Lloyd, Sir Ian (Havant)
Shepherd, Colin (Hereford)


Lord, Michael
Shepherd, Richard (Aldridge)


Luce, Rt Hon Richard
Shersby, Michael


Lyell, Nicholas
Silvester, Fred


McCrindle, Robert
Sims, Roger






Skeet, Sir Trevor
van Straubenzee, Sir W.


Smith, Tim (Beaconsfield)
Vaughan, Sir Gerard


Soames, Hon Nicholas
Waddington, David


Speller, Tony
Wakeham, Rt Hon John


Squire, Robin
Walden, George


Stanbrook, Ivor
Wall, Sir Patrick


Stanley, Rt Hon John
Waller, Gary


Stern, Michael
Wardle, C. (Bexhill)


Stevens, Lewis (Nuneaton)
Warren, Kenneth


Stewart, Allan (Eastwood)
Watson, John


Stewart, Andrew (Sherwood)
Watts, John


Stewart, Ian (Hertf'dshire N)
Wells, Bowen (Hertford)


Stradling Thomas, Sir John
Wells, Sir John (Maidstone)


Sumberg, David
Wheeler, John


Tapsell, Sir Peter
Whitfield, John


Taylor, John (Solihull)
Whitney, Raymond


Taylor, Teddy (S'end E)
Wiggin, Jerry


Temple-Morris, Peter
Winterton, Mrs Ann


Thompson, Donald (Calder V)
Wood, Timothy


Thornton, Malcolm
Young, Sir George (Acton)


Thurnham, Peter
Younger, Rt Hon George


Townend, John (Bridlington)



Townsend, Cyril D. (B'heath)
Tellers for the Noes:


Tracey, Richard
Mr. Peter Lloyd and


Trippier, David
Mr. David Lightbown.


Trotter, Neville

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Question on amendments) and agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House congratulates the financial services sector on its contribution to invisible earnings, to growth in employment and on the efficient and effective way it raised £6 billion for industry and commerce in 1985; congratulates Her Majesty's Government and the financial services sector on their prompt and effective action against insider dealing; and reaffirms its support for self-regulation within the statutory framework of the Financial Services Act as the most effective system of regulating the City.

Orders of the Day — Fuel Poverty

Mr. Michael Meacher: I beg to move,
That this House, noting the huge increase in deaths from hypothermia and cold related conditions that occurred last winter, and noting the extreme restrictiveness and arbitrariness of the Government's proposed cold weather payments scheme which is likely to offer only miniscule aid to only one in eight pensioners only once in five years, calls on the Government to guarantee all poor pensioners a £5 a week winter premium throughout the winter months, while at the same time protecting all households with persons at risk from fuel disconnection and instituting a major programme of home insulation which will both create jobs and conserve energy.

Mr. Deputy Speaker (Mr. Harold Walker): I inform the House that the amendment standing in the names of the Prime Minister and others has been selected by Mr. Speaker.

Mr. Meacher: This is the third time in three years that we have had this debate, and it is extremely regrettable that it is necessary yet again. It is necessary because the Government have it within their power at this time of year to prevent the needless deaths of many elderly people from hypothermia and cold-related conditions. Yet in the past two winters the Government have manifestly and tragically failed to exercise that power.
This debate is intended as a warning to the Government that the roll call of preventable deaths must never be allowed to happen again, and that means that the Government's latest cold weather payments scheme must be changed drastically while there is still time.
In the first three months of 1984, nearly 400 people died from hypothermia, according to the official figures. The Government introduced for the next winter exceptionally severe weather payments, which were triggered by temperature readings at a number of weather stations. The scheme was a fiasco. In the first three months of 1985, 630 died from hypothermia. The Government changed the system to allow discretion to adjudication officers locally to determine exceptionally severe weather. That, too, was a fiasco. In the first three months of 1986, 578 died of hypothermia. Three weeks into the bitterly cold spell at the start of this year, fewer than half of the 450 local DHSS offices considered that the weather was exceptionally severe.

Mr. Richard Hickmet: I am aware of the hon. Gentleman's concern, but is he aware of the statement by Lord Marshall, the chairman of the Central Electricity Generating Board, that if we phase out nuclear power the price of electricity will rise between 15 and 20 per cent. and that during the very periods of which the hon. Gentleman is talking Lord Marshall could not guarantee continuity of supply? Does the hon. Gentleman favour phasing out nuclear power? If so, what does he think that that will do for hypothermia among the elderly?

Mr. Meacher: That was an unwise intervention. First, the Government have not ordered one new power station, either nuclear or coal-fired, in the past seven years. Secondly, anyone who regards Lord Marshall as an independent witness to the relative costs of electricity as between nuclear and coal-fired power stations is risking a great deal of his intellectual reputation.
The figures that I have quoted greatly understate the ravages of a bitterly cold winter. Many extra deaths occur


because of cold-related respiratory conditions such as bronchial pneumonia or circulatory conditions, such as heart attacks or strokes, as well as through hypothermia. In Britain there are about 50,000 extra deaths in the autumn and winter compared with the number of deaths in the previous six months.

Mr. Andrew MacKay: I wonder whether the hon. Gentleman is aware of the winter which produced the highest number of excess deaths? That winter was 1978–79, when he was a DHSS Minister. Perhaps he will explain that.

Meacher: I do not have the figures in front of me, but every year for the past decade—I am not making a party political point, and the hon. Gentleman is unwise to enter into that—there have been between 40,000 and 60,000 excess deaths in the autumn and winter compared with the number in the spring and summer. It makes little difference which Government are in office.
There need be nothing inevitable about more deaths occurring in the autumn and winter. In Canada and Sweden the winters are longer than ours and much more severe, yet there are almost no variations in infant mortality or old-age mortality between the summer and winter months. If that can be achieved in those countries, why can it not be achieved here?
Hundreds of pensioners will die this winter because the steps that the Government are taking to prevent that happening are pathetically inadequate. Indeed, they are almost derisory. Under the Government's new scheme, severe weather payments will be made only when the temperature falls below minus 1·5 deg C over seven days from Monday to Sunday, as if the weather were neatly packaged into convenient batches that nicely coincided with DHSS office hours. If that formula had been in operation last winter, which was the coldest for 40 years, no less than half the country would have been excluded. In February, when an estimated 7,000 elderly people died from the cold, the average temperature was minus 0·9 deg C. Even that bitterly cold month would not have triggered the minus 1·5 deg C threshold. Only three out of 14 weather stations in Scotland would have triggered the benefit.
Large areas of Wales, the south-west and the north-east of England would have got nothing. Pensioners in Greater London, Glasgow, Sheffield and other major cities would have been entitled to the extra payment for only one week, even though in the shambles of last winter's scheme, the severe weather payments were declared for three weeks or more in those areas. In other words, although the payments made last winter were, by all accounts, paltry, inefficient, arbitrary and delayed, it is likely that even fewer households will be eligible to claim them this winter.

The Minister for Social Security (Mr. John Major): Although the 0·9 per cent. figure quoted by the hon. Gentleman is an interesting one, I fear that he is mistaken. The figure of minus 0·9 deg C has been widely misunderstood, and it is clear that the hon. Gentleman has misunderstood it as well. [Interruption.] If the right hon. Member for Salford, East (Mr. Orme) will listen, I shall correct his hon. Friend's fault. That figure is an average one and was recorded at several weather stations in central England only. It is not the average for the whole country.

As the hon. Member for Oldham, West is well aware, the essence of the exceptionally severe weather payments scheme is to direct special help to special areas at times of special cold.

Mr. Meacher: Given the clarification that the Minister has provided, how many of the 64 areas that are covered by the present scheme would have triggered the benefit? Even bearing his point in mind, is it not the case that fewer than half of those areas would have triggered the benefit?
There are other major drawbacks to the Government's scheme. Severe weather will still be declared regionally and that will still give rise to anomalies and misunderstandings between districts. The categories of persons eligible have been sharply cut. Previously everyone claiming supplementary benefit, who qualified for a single payment, would have been eligible for an exceptionally severe weather payment. Under the present scheme only households with someone under two years of age, or over 65, or with a person who is chronically sick and disabled will qualify for help. Nobody with more than £500 in the bank will be eligible. Therefore, the great majority of poor pensioners on supplementary benefit will not be eligible.
Perhaps the most significant point is that the scheme is still not automatic in any way. It still puts the onus on the claimants to make the claims, and that will undoubtedly reduce even further the low take-up that the Government expect among pensioners.

Mr. David Winnick: Does my hon. Friend agree that the £500 limit is extremely mean-minded and undermines successive Governments' pleas for saving? What does £500 now amount to? We should bear in mind that many elderly people—perfectly understandably—save up for their funeral costs. They find pride and dignity in being able to be buried without having to ask their relatives to help them financially. Why should the Government penalise those people?

Mr. Meacher: My hon. Friend has made an important point. It may surprise Conservative Members to know that the limit might discourage elderly people from saving for their own funerals. I do not know whether that was intended, but it will be the effect. It is extremely mean to make the limit as low as £500, when it is possible for somebody to have £3,000 in the bank and still get supplementary benefit. The limit of £500 is only one sixth of that total.
By any standard, it is a pathetic little scheme, hedged around with so many petty constraints as to make the aid provided minuscule. Even on the Government's own assumptions, only about one in every eight pensioners is likely to be able to claim payment once every five years. If a few do manage to break through the bureaucratic thicket, their reward will be precisely £5, which is about enough to heat one room for a couple of days.
There is a foreign proverb that says "The mountains are in labour and they bring forth a mouse", and that just about sums up the scheme.

Mr. Patrick Nicholls: Will the hon. Gentleman give way?

Mr. Meacher: No, I shall not because I wish to make further progress.
The absurd inadequacies of the proposals result from the Government having the wrong objective at the outset. The Government never asked the relevant questions,


which are how we can vanquish hypothermia, and what level of extra heating payments, plus home insulation, is necessary to do that.
The Government started from a completely different premise. They made the crucial political decision that the payment will be limited to places of "exceptionally" severe weather. That is their word. The Government continued by making the administrative assumption that exceptionally severe weather should mean that claims are made only about once every five years. In paragraph 23 of their consultative paper, the Government say:
The purpose is to set up a system which on the basis of historical data would imply that help over a significant part of the country overall would be expected to be given about once in five years over a longer period of years.
In other words, help will not be given according to what is needed, but only to claimants who happen to fit the mean and niggardly political and financial constraints that were laid down centrally.
Paragraph 24 makes clear that: it was in order to secure that claims can only be made once in every five years that the trigger point was fixed at minus 1·5 deg C. That was not an accident; it was done deliberately and it was designed to ensure that only a tiny number of pensioners received payment, that they did so only infrequently, and that if and when they got the payment, it would be minute.

Mr. Hickmet: rose—

Mr. Nicholls: rose—

Mr. Meacher: No, I shall not give way. I have already given way to the hon. Member for Teignbridge.
I am, of course, perfectly well aware of the Government's reply to my case. Exceptionally severe weather payments are not the primary weapon in the battle against hypothermia. The Government say that that role is played by the supplementary benefit scale rates, including a fuel element, plus the weekly heating addition. We have heard that defence many times, and it is deeply flawed on two grounds.
First, whatever claims Ministers make about the scale rates and heating additions, more people, and not fewer, died of hypothermia in the past two winters than for a decade. Therefore, the scale rates and heating additions were inadequate to keep people warm, and there is no way that the piffling little extra of exceptionally severe weather payments could be regarded as compensating for that fundamental inadequacy.
Secondly, the heating additions and other heating payments have been cut by the Government in many cases, and I hope that the Minister will have the grace to admit that. Under the available scale margin rule, pensioners, long-term disabled people and single parents have had their weekly heating addition cut by £52 per year by the Government. Moreover, in August 1985 the Government abolished central heating additions for all new claimants—a benefit worth £228 a year at current rates.

Mr. Nicholls: Will the hon. Gentleman give way on the specific point of abolition?

Mr. Meacher: No, I should make progress because I have several points still to make.
There is still worse to come. Under the Fowler Social Security Act, when income support is introduced in 1988 additional help with heating costs will be abolished by the Government. We put down an amendment in Committee which would have introduced heating premiums for

accommodation that is difficult to heat and for expensive heating systems on estates. But the Government voted it down. Therefore, it does not lie with the Government, when confronted with the derisory nature of the exceptionally severe weather scheme, to fall back on the heating addition. Their record on that, too, is pretty culpable.
Keeping warm is not only a matter of being able to pay for enough fuel; it is also about retaining heat in well insulated buildings. Again, the Government's record has been—

Mr. Hickmet: What did the hon. Gentleman's party do?

Mr. Meacher: We did not do what I am just about to describe.

Mr. Nicholls: rose—

Mr. Meacher: The Government's record on that front, too, has been abysmal as well as short-sighted. Resources being invested in better insulation and in heating measures have declined by 50 per cent. since 1979. In other words, in answer to the hon. Member for Glanford and Scunthorpe (Mr. Hickmet), what we provided for those purposes was 50 per cent. higher than it is now. Those on benefit can obtain grants, but they are for draught-proofing only.

Mr. John Powley: Will the hon. Gentleman give way?

Mr. Meacher: No, I shall not give way because I want to make progress.
Now the Government are proposing to end those grants when the Fowler Social Security Act is implemented in 1986 and the social fund introduced. Any assistance will then be subject to the discretion of the local offices and the state of a cash-limited budget for the social fund.
Such parsimony over insulation and draught-proofing is surely counter-productive, and anyone should be able to see that. It is a false economy if ever there was one. Labour Members believe that increased investment in insulation—that is what we achieved in the 1970s—and energy efficiency, would not only bring greater comfort and reduce fuel poverty, it would also provide for much better management of the taxpayers' resources—something that Conservative Members are often so concerned about.
Therefore, I hope that the Government will reconsider their reprehensible decision to end single payments for draught-proofing materials and hot water tank projects, and not allow the commendable work of neighbourhood energy action, which has draught-proofed the homes of nearly 250,000 pensioners and others, and provided work for over 5,000 people on the community programme, to grind to a halt.
Only a major insulation programme can end the disgrace whereby year after year Government policy condemns elderly people to live at temperatures prohibited by law for younger and fitter workers. The Department of Health and Social Security, in one of its leaflets, which I note was later withdrawn—presumably because of embarrassment—stated that a living room temperature of 70 deg F is necessary to keep people warm in winter. Yet repeated surveys have found that nine out of 10 old people have living room temperatures at or below 68 deg and more than half were below 60·8 deg, which is the minimum temperature specified in the Offices, Shops and Railway


Premises Act 1963. If that is intolerable for young people, it is scandalous that it is permitted with impunity for old people in Britain.
For all those reasons the Labour party believes that a two-part programme is now urgently needed to resolve the problem. First, we believe that the only way to ensure guaranteed help with heating is by providing extra payments on a regular automatic basis each week throughout the winter months. Therefore, we propose a £5 a week extra winter premium throughout the winter for all pensioners on supplementary benefit, plus another million who, while not on supplementary benefit, are little better off.

Mr. Gordon Wilson: I am grateful to the hon. Gentleman for giving way. The Labour party's proposed scheme of £5 per week does not take into account two main factors. One is that the further north one goes, the longer and harsher the winters are, and the second is that it costs perhaps 20 per cent. more to heat a house in Glasgow than in Bristol. Does the hon. Gentleman not think it unfair that those who live further north should be given the same as those who live in the warmer south?

Mr. Meacher: I take the hon. Gentleman's point, but an extra £5 a week, payable over 12 or 13 weeks, is a considerable extra sum of money which will meet the problem, even for those in the north, let alone for those in the south. It was not designed for those in the south and to penalise those in the north. It will be adequate right across the country.

Mr. Frank Field: Will my hon. Friend give way?

Mr. Meacher: I shall give way for the last time.

Mr. Field: I am grateful to my hon. Friend for giving way. I hope that Conservative Members heard my hon. Friend say that this is the last time that he will give way.
What my hon. Friend has just said is of crucial importance to Labour Members because we hope, after the next election, to be on the Government Benches. Is my hon. Friend's pledge of the £5 increase on a par with the increase that we have given to the rate of national insurance pensions?

Mr. Meacher: Yes. There is no question but that that is a commitment and it stands alongside the £5 and £8 by which we shall increase the pension, together with the change in the upratings to restore the link with earnings which the Government have taken away and thereby deprived single pensioners of approximately £8 a week and married pensioners of £12 a week. All of those are firm commitments. If the Government wish to know where the extra money will come from, I suggest that they could preempt us by using some of the extra £4·5 billion that they will somehow no doubt be able to find this year for pre-electoral tax bribes.
We also believe that payments must be combined with a major programme to improve home insulation and to increase energy efficiency. There are few instances where the social and economic benefits of job creation, energy conservation and pensioners' health and comfort are so readily fully and brought together. It would massively reduce the ill health generated by damp cold conditions

and the nation's housing stock could be greatly improved. Therefore, we call upon the Government in our motion to adopt the programme for the battle against hypothermia and the scourge of preventable death in old age. If the Government will not do it, the next Labour Government will.

The Minister for Social Security (Mr. John Major): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
welcomes the considerable improvement under this Government in support with heating costs for vulnerable groups through the supplementary benefit scale rates, the weekly heating additions and the simpler and better targeted arrangements for help during periods of exceptionally cold weather; supports the comprehensive action taken to improve energy efficiency in the home; and applauds the beneficial effect of low inflation on the costs of fuel, which is of immense benefit to all consumers but most especially those on low incomes.
The hon. Member for Oldham, West (Mr. Meacher) has just demonstrated most graphically that fuel policy is an emotive matter. He has demonstrated equally graphically that he has not lost the knack of making expensive speeches. I shall come to the costings of his latest promises this evening in a few moments.
The hon. Gentleman has also made it clear that this is a particularly important area and that it is difficult for it to be the subject of rational debate. It is, by its nature, the sort of subject that can be misunderstood, misinterpreted and even twisted into a grotesque parody of what the Government have done. It would be easy for the debate to fall into such exchanges, but in a few moments I propose to deal at length with some of the important underlying aspects on which the hon. Gentleman touched in the course of his remarks.
First—and unusually, because this is not my favoured reading—I should like to refer to a statement issued by the hon. Member for Oldham, West on 18 September, in which he trailed his winter premium of £5 a week. He said:
We will also establish a winter premium of £5 a week for the months between mid December and March for pensioners on low incomes to help cover winter fuel bills and"—listen to this—
prevent any repetition of the 16,000 extra deaths from hypothermia that scarred this country last winter.

Mr. Meacher: Quite right.

Mr. Major: The hon. Gentleman says, "Quite right." He said that there were 16,000 extra deaths from hypothermia, yet just a few minutes ago he said that there were only 400 or 500. The hon. Gentleman is inept with his figures. On 18 September he said that there were 16,000 extra deaths, but he said something quite different a few moments ago.

Mr. Meacher: I did not say anything different. Perhaps the Minister would care to listen to me. I made it perfectly clear that the deaths from cold in winter are not just those where hypothermia is primarily mentioned on the death certificate, but where broncho-pneumonia, heart attacks and strokes, precipitated by the bitterly cold conditions, also led to death. Those deaths add up to 16,000 a year.

Mr. Major: As a matter of fact, they do not. I am very curious about the statement made by the hon. Gentleman on 18 September in which he said that there were 16,000 extra deaths from hypothermia. The hon. Gentleman has


now concluded that what he said on 18 September was utterly wrong. I am grateful that he has put that clearly on the record. The 16,000 extra deaths as a result of hypothermia is nonsense, and the hon. Gentleman knows that.

Mr. Geoffrey Lofthouse: Stop playing about with figures.

Mr. Major: The hon. Gentleman has asked me to stop playing about. He clearly does not like facts. That is the trouble with the Labour party. It is very fond of hyperbole, but, by golly, it does not like facts, and that shows.
The hon. Member for Oldham, West referred rather more accurately to the true figures of deaths related either primarily or as a secondary condition to hypothermia. He said that the position had become materially worse. In 1984–85 there were 638 deaths in which hypothermia was mentioned by the doctor in some form or other on the death certificate. Last year there were 634—slightly less. The average is 543. As my hon. Friend the Member for Berkshire, East (Mr. MacKay) said earlier in his telling intervention, the highest figure in the past 10 years was in 1978–79 when there were 725 deaths. I am not inclined to listen to too many lectures from the hon. Member for Oldham, West.
The hon. Member for Oldham, West spent some time debating not the broad measure of this extraordinarily ill-drafted motion, but the details of the exceptionally cold weather regime. I do not object to that because that is an important point. However, I would like to quote what the hon. Gentleman said on 25 February 1986. Addressing his remarks to my hon. Friend the then Minister for Social Security, he said:
Will he…send out a circular to all DHSS offices to ensure that all the very elderly and the severely disabled on supplementary benefit get an immediate extra cash grant of at least £5 a week for heating while the severe cold spell lasts?"—[Official Report, 25 February 1986; Vol. 92, c. 799.]
That was the proposition. That is what we have done in the regulations, and now the hon. Gentleman is wriggling and changing his view.
The hon. Member for Oldham, West also spoke about the £500 single payment capital limit, and he called that unreasonable. However, the hon. Gentleman has a very selective memory. It was equally the case, when he was a Minister in the DHSS, that single payments were not paid to people with sufficient capital. In those days, of course, the capital was not £500, but £300, and before that, while the hon. Gentleman was a Minister, it was £200. I am therefore not inclined to accept lectures from the hon. Gentleman about that.

Mr. Meacher: Will the Minister give way?

Mr. Major: In just a minute.
The hon. Gentleman also said that we are stopping help with heating costs. He knows, because he sat through all—or nearly all—the proceedings on the Social Security Act 1986, that the income support scheme will sweep up all that money and direct it. He knows that it is not disappearing back to the Treasury, despite all that he said earlier. If the hon. Gentleman wishes to intervene, he may now do so.

Mr. Meacher: The Minister has made three false statements. The social fund will not sweep up all the money.

Mr. Major: I did not refer to the social fund.

Mr. Meacher: I thought that the Minister did mention the social fund. That will be cash limited.
With regard to the Labour party's record, I must make a crucial point that influences the issue about heating. Under the Labour Government, the pension increased by 20 per cent. in real terms. That is far more than all the increases in heating addition brought about by this Government.

Mr. Major: I fear that the hon. Gentleman has missed the point upon which he seems especially defensive. He also missed out the pensions fiddle of 1976 and the years in which the Labour Government did not pay the Christmas bonus. The hon. Gentleman's memory appears to be amazingly selective.
Many observers of such debates over the past year or so might well assume—and they would have assumed this, too, from what the hon. Member for Oldham, West has said—that exceptionally severe weather payments represent the most important help available to meet fuel costs. The hon. Gentleman knows that that is not so, and I conceded that. An observer may feel that supplementary benefit rates had fallen so much in value as to present beneficiaries with a stark choice between food and heat. However, the hon. Member for Oldham, West also knows that that is not so.
An observer might also feel, after hearing the hon. Gentleman, that the extra help through heating additions had also been reduced. That is not so. The observer might feel that fuel prices were soaring out of control, as they did when the Labour party was in government, yet that is not so now. The truth is that help with fuel and advice on keeping warm economically is running at record levels.
This evening the hon. Member for Oldham, West resurrected from his speech on 18 September his proposals for a winter premium for pensioners. Before I consider that in depth—

Mr. Hickmet: My hon. Friend will have heard the response made by the hon. Member for Oldham, West (Mr. Meacher) to the question of phasing out nuclear power and what that would do to the continuity and cost of supply of electricity. Will my hon. Friend direct his attention to the position if Mr. Arthur Scargill had succeeded in his attempts in 1984 and 1985, and tell us what that would have done to electricity prices? At the same time, will my hon. Friend consider the level and the amount by which electricity prices have risen in the past 18 months or two years under this Government?

Mr. Major: I hesitate to speculate on the subject of Arthur Scargill, not least as he seems substantially to have disappeared from a position of great influence in the public eye—and long may he remain without such influence. I rather suspect that that view is shared more warmly on the Opposition Benches, for understandable reasons, than on the Conservative Benches.
My hon. Friend is correct to make the assertion that fuel prices these days are near stable, whereas they were anything but near stable during the period of the Labour Administration. I suspect that my hon. Friend the Under-Secretary of State for Energy may touch on that point when he replies.
The hon. Member for Oldham, West raised a worrying issue about which I share his concern. He referred to the excess number of winter deaths that have perplexed successive Governments for years. Contained within that


issue is the question of hypothermia. In order to define excess winter mortality over five-year periods, I must explain that the percentage increase in the number of deaths in the January to March quarter is set against the number of deaths in the July to September quarter. That figure has fallen from 68·2 per cent. in 1951 to 1955 to 29·3 per cent. over the past five years. That has been a steady decline, with the exception of a slight increase from 28·2 per cent. in 1971 to 1975 to 33·6 per cent. between 1976 to 1980. The hon. Gentleman will recall that well because he was a Minister for part of the period covered by the figures.
The real problem, then as now—I agree with the hon. Gentleman about this—is not hypothermia, but the additional deaths from all causes, particularly heart disease, strokes and chest infections, which tend to occur in winter. It is a long-standing problem that our excess winter mortality rate is higher than that in other countries with severe winters, such as the United States of America and Sweden. Governments of both parties have faced that problem for 30 years, and the position seems to be improving. We all welcome that.
Within that problem lies the vexed, but smaller, problem of hypothermia. It is now generally recognised, certainly by experts, that the number of deaths where hypothermia is recorded on the death certificate, whether as the main cause of death or otherwise—generally it is otherwise—is not in any way an accurate indication of the extent of deaths associated with winter weather. I should point out that in recent years there has been no trend either upwards or downwards in the number of deaths where hypothermia was mentioned on the death certificate. I gave the figures when I intervened a few moments ago.
There are important issues at stake, and this evening I do not intend simply to bandy statistics across the Dispatch Box. I intend to address the underlying public health problem. It is not as easy as the hon. Gentleman implied to find the root cause of the problem and how it can best be tackled. Several matters are self-evident. Obviously, it is important that elderly people should be able to heat their homes properly, and shortly I shall remind the House of the steps that the Government have taken to enable them to do so. But there is certainly a good deal more to it than that.
Some hon. Members may have observed a recent interesting article in the British Medical Journal by Professor Keatinge from the London hospital. He is a distinguished and acknowledged international expert on cold-related diseases. He unearthed a curious conundrum: he found that the mortality rate among a sample of elderly people living in centrally heated warden-controlled accommodation rose in winter by a percentage similar to that among the general population. That is curious and in sharp contrast to the underlying theme of the hon. Gentleman's attack on the Government.
On the basis of what we know at present, no one can be sure—neither the hon. Gentleman, me, nor even Profesor Keatinge—why excess winter mortality is more prevalent in the United Kingdom than in other countries. Nor can we be entirely sure why the position has been improving recently. It seems that a number of factors may be involved. I am absolutely clear that we need to do further work to reach a better understanding of what I

acknowledge is a serious and complex issue. My right hon. Friend the Secretary of State is actively considering how that can best be carried forward, and we hope to be able to say someting more about that shortly.

Mr. Frank Field: The Minister compared the deaths of those in warden-controlled accommodation with those outside. In my constituency one gains access to such accommodation only if one is severely ill. In that case, would one not expect the death rate to be higher there than among the normal population? Does he agree that that may be the balancing factor rather than the fact that one person may have more heat and another less?

Mr. Major: There are a variety of explanations. It is not invariably or necessarily the circumstances that the hon. Gentleman describes that determine admission to warden-controlled accommodation. In my constituency there are premises where that would not be the case. I sought not to make a specific point, but to illustrate the perplexities sorrounding this difficult problem.
The scale of assistance to vulnerable groups, which is available through the social security system, is central to our debate. There have been significant improvements, but, before I turn to them, I must stress the most important point. The primary help for claimants with their heating costs, now and under the Labour Government, is through their regular weekly benefit and specific heating additions. Since 1978, the value of the scale rates has risen by 6 per cent.
There have also been significant improvements in the value of heating additions. We have consolidated and extended automatic entitlement to heating additions to the most vulnerable groups. Families on supplementary benefit with children under five are guaranteed a heating addition of £2·20 a week. Pensioner householders aged 65 or over are now guaranteed the same addition, as are all sick and disabled householders on the long-term supplementary benefit rate. Pensioners over 85 get a higher rate of £5·55 a week, and that higher rate is also paid automatically to those receiving attendance allowance and mobility allowance.
The hon. Member for Oldham, West will know that the number of recipients of those disability benefits has increased significantly under this Government. As that general rise has occurred, so, as a direct consequence, has support for heating for those on low incomes. None of those improvements rated a proper mention in the hon. Gentleman's catalogue of misery, although every one is important and germane. One is bound to ask whether the hon. Gentleman was misinformed or was seeking to misinform.

Mr. Winnick: Will the Minister give a guarantee to the House that all those receiving heating addition from the supplementary benefit system will not lose out when supplementary benefit is replaced by the new system of income support?

Mr. Major: The hon. Gentleman knows the pledges that we have given on transitional protection, that we have not yet determined the rate for the income support scheme and that we will not do so until next year's uprating. Therefore, he deliberately asked a question which he knows cannot be answered now. The hon. Gentleman cannot ignore the fact that on the latest available information over 2,750,000 supplementary benefit householders now receive a heating addition of some sort.
More important—the hon. Member for Oldham, West may care to listen to this—some 90 per cent. of all pensioners benefited, compared with 71 per cent. in 1978. That is a significant improvement in recent years. Moreover, the value of those additions in 1984–85 was £400 million—a vast increase on anything available under the Labour Government, even when one discounts inflation. Against that background the hon. Gentleman's charges against the Government are ludicrous. They simply do not stand up to a moment's examination. He spoke at length about new arrangements for single payments in periods of exceptionally cold weather, wholly ignoring that they substantially meet what he specifically asked my right hon. Friend for last year.
I shall start with a proposition that neither the hon. Member for Oldham. West, nor the hon. Member for Dunfermline, East (Mr. Brown), who is poised on springs at this very moment, will dispute for a second. Over the years the various systems for making payments have been contentious and unsuccessful. There is no dispute across the House about that. That is why we have tried to introduce a system which makes sense, judged by three criteria.
First, there must be clear rules for help. For that reason we propose an objective test of absolute coldness as the basic qualifying rule. I agree with the view expressed, particularly by hon. Members who represent Scottish constituencies, that nobody wants to return to a system which relies on local subjective judgments. I hoped to hear the hon. Member for Oldham, West welcome that, but I hoped in vain.
Secondly, there must be certainty and speed of response. Claimants must know quickly when a period of exceptionally cold weather has been declared and for how much they will qualify. This new system should achieve that. In addition, we have provided for flat-rate payments rather than for the production of a fuel bill some time later. That should be speedier and simpler, and I would have been grateful if the hon. Gentleman had welcomed it.
Thirdly, we have concentrated help on the groups of people—the elderly, the sick, the disabled and the very young—on whom most of the concern about risks during periods of bad weather have centred. It is precisely because of our concerns about those vulnerable groups in exceptionally cold weather that we have restricted the broad entitlement and sharpened the availability to those most in need, who are likely to receive more than they would have done under the previous arrangements.
Let me remind the Government's critics of the final conclusion of the Social Security Advisory Committee—my right hon. Friend's independent advisers. The committee gave general support to the main elements of the proposals, and said:
The proposals submitted to us represent a significant improvement on the previous schemes for exceptionally severe weather payments, in terms of simplicity, comprehensibility and certainty of payment.

Mr. Wilson: Does the Minister agree that the vulnerable groups about which he has spoken need to buy heat when the temperature declines? Under his new scheme they will not be aware whether they qualify until seven days have elapsed. His proposed scheme is marginally better than the old one, which discriminates against cold areas like Scotland, but does he not agree that the scheme is so fundamentally flawed as to be useless?

Mr. Major: I do not accept that. It is true that one must wait for seven days, but the hon. Gentleman will recall that previously one had to wait until a bill was received. Then it had to be determined whether it was materially higher than in the previous year and documents had to be produced to prove that. The money was paid substantially later. The new scheme is a material improvement.

Mr. Frank Field: I am sure that there is widespread support for the view that such a scheme is crucial, that people know when they are eligible and that the money should be paid quickly rather than oblige people to wait months for the bill. People also want to know how many will benefit and by how much. Has the Minister estimated for the Treasury or for any other Government Department the numbers of people who will gain? Will there be more or fewer beneficiaries than under the present scheme, and will those who are eligible gain more or less than they are currently paid?

Mr. Major: If fewer people are eligible, each person will receive more and we expect the cost to be broadly the same at it was last year.

Mr. Frank Field: rose—

Mr. Major: I shall not give way again. The hon. Member for Oldham, West is fulminating about this being a three-hour debate and I have spent most of my time giving way to his hon. Friends. We released with the documentation a breakdown of what the position would have been last year under this scheme. I think I shall now take the hon. Gentleman's near silent fulminations to heart and move on. We do not yet have final figures, but the amount is about £15 million, which is eight times higher than it was four years ago.

Mr. Gordon Brown: rose—

Mr. Major: The hon. Member for Oldham, West is muttering about this being a three-hour debate. I have some sympathy with him about that, and for that reason I will not give way again. If he is dissatisfied, the hon. Member for Dunfermline, East can take the matter up with his hon. Friend.
In the context of these proposals, the hon. Gentleman might bear in mind that the Social Security Advisory Committee supported an absolute standard of coldness, recognised the reasonableness of the Government's approach, supported the principle of a fixed seven-day period, recognised that the system of linking local offices with meteorological office data is a clear improvement on previous methods, and welcomed the introduction of a system of standard payments. It is a shame that the hon. Member for Oldham, West neglected to mention all of those points in his speech. The Social Security Advisory Committee cannot be considered an uncritical supporter of the Government.
The hon. Member for Oldham, West set out proposals for a winter premium—

Mr. Gordon Brown: Will the Minister give way?

Mr. Major: I have told the hon. Gentleman why I will not give way. He can take up the point with his hon. Friend the Member for Oldham, West.

Mr. Brown: rose—

Mr. Deputy Speaker (Mr. Harold Walker): Order. The Minister has said that he will not give way.

Mr. Major: The winter premium scheme outlined by the hon. Member for Oldham, West is expensive. We do not have full details, but it looks as though it would cost about £150 million or more, depending on precise assumptions about how the scheme would work. The hon. Gentleman was somewhat coy about the priority for these proposals. As I understand the matter, it was not part of the Opposition's original list of absolute priorities in their September statements. But things appear to have changed. In statements to Neighbourhood Energy Action and at a recent conference on welfare rights activities, the hon. Gentleman seemed to be making clear that this was an absolute priority. I hope that he will now clarify that. Is it an absolute pledge? If it is, it is another ring on the cash register of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). Perhaps it is a pious hope, in which case it is deeply cynical. Perhaps the hon. Gentleman or his right hon. Friend will make it clear.
It is apparently to be a system purely for pensioners on supplementary benefit and widows and pensioners "living on the margins of poverty". No mention is made of the needs of disabled people or families with children. Are they to be forgotten in the hon. Gentleman's brand new world? Has the hon. Gentleman considered how his scheme would be operated? He is effectively asking for a further uprating each winter for pensioners and a substantial extra burden on hard-pressed local DHSS office staff or an additional cost for extra staff to administer it. Moreover, he does that at the same time as he chairs press conferences of the departmental trade unions complaining about staff pressures. It is curious that he should take both those views at the same time.
Under the present benefit system, which the hon. Gentleman seems to want to retain, the effect would be that large numbers of pensioners would be moved on and off benefit and housing benefit supplement just for winter. That is a certain recipe for total confusion and the hon. Gentleman should know that.
The feature of our reforms which has been most welcomed is the proposal that assessment of housing costs and living expenses should be based on a common test of need. Is the hon. Gentleman abandoning that principle that he previously supported? If not, the logic of his proposal is that each winter local authorities should increase housing benefit or accommodate the value of the winter premium. The hon. Gentleman is in danger of re-creating the problem that led to the creation of housing benefit supplement.
There is a further bizarre aspect that has an odd and unwelcome effect for pensioners. Let me illustrate—[Interruption.] The hon. Gentleman may be wholly wrong about that. The current rate for a single pensioner is £37·90. Let us take a charitable assumption, that inflation under a Labour Government would be only 5 per cent. If benefits were uprated by that amount, the pension would be increased to £39·80 at the April uprating. But if the pensioner had been receiving a winter premium of £5 which was withdrawn at the same time, the effect would be that benefit would actually go down by £3·10 at the time of the uprating. I would not wish to be the Secretary of State who tried to explain to a gathering of pensioners why, when benefits were increased, their girocheques should be less. Fortunately for the hon. Gentleman, he will never be required to do so, although I know that he has some experience of pensioners shouting at him.
There is much else relevant to this debate that deserves more attention than time permits, including perhaps the hon. Member for Dumfermline, East. I utterly reject the Opposition charges against the Government's record, but I do share with them a concern about excess winter mortality and the need to keep elderly people warm.
We have set in hand a range of measures to promote energy efficiency. There has been a major expansion in community insulation projects that has insulated and draught-proofed over 200,000 homes of pensioners, the disabled and others on low incomes. The costs of that have been borne by the Government through the Departments of Energy, Environment, Employment and Social Security.
Above all, there has been a substantial improvement in supplementary benefit rates, in heating additions and in the targeting of cold weather payments. We have an impressive record over recent years, far better than any previous Labour Government achieved, and we need no lectures from the Opposition about how to care for the elderly. When my hon. Friends vote on this amendment, they will clearly show the hon. Member for Oldham, West what they think of his motion.

Mr. Archy Kirkwood: The speeches from both Front Benches reinforce my view that it is extremely difficult to conduct debates about excess winter mortality and the perplexing difficulties of the statistics about hypothermia. I accept that there are problems in exactly equating excess winter mortality, about which the Minister spoke, directly with poverty, although there are some important links. There is a public health aspect to the problem related to hypothermia and it requires sober and long-term reflection.
As the basis for my speech, I should like to look not just at the number of deaths which, of course, are important and must be attended to, but at the far more widespread problem of people who do not die because they cannot heat their homes adequately, but nevertheless suffer severe restrictions in their living standards. Some of them have to stay in bed for long periods during the day simply because they cannot heat their homes. That is a much more rational target for the Government, because there are real problems involved in curing the cause of hypothermia.
On the severe weather payments to which the Opposition's motion refers, I understand the Government's reason for introducing the new scheme and the changes that will be involved. I welcomed some of the changes, and I said so at the time. However, the hon. Member for Oldham, West (Mr. Meacher) was right to say that the scheme is too restrictive. The Minister said that the scheme will cost about £15 million.
I may recommend my right hon. and hon. Friends to support the Opposition's motion, but if I do that at the end of the debate it will be not because of the costs that the Opposition's scheme involves but rather because I believe that they have made very pertinent criticisms of the present Government policies, one of which relates directly to the new proposals for severe weather payments. The Government's scheme is too restrictive. I invite the Minister to consider extending the seven-day qualifying period and making it a rolling period so that the scheme is more flexible. That would not break the bank. It would lead to increased cost, but that cost would be manageable.


It would not be within the unmanageable realms of the Opposition's proposal for a flat rate payment of £5 to poor pensioners throughout the winter months.
The Minister should also reconsider the absolute temperature limit that has been fixed at minus 1·5 deg C. That is a very low temperature. I am a Scot and I am used to cold temperatures, but that is far too low. The Government should push it up slightly. It may not be too late for the Minister to do so. Perhaps the Minister will be able to assure the House that he will look at the way the scheme operates this year and that, if we are able to satisfy him that it is too restrictive when the results eventually become clear, he will reconsider it.
The Opposition motion also refers to fuel disconnection. I am very concerned about the operation of some of the voluntary codes of practice relating to fuel disconnection. The Government would do themselves no harm at all if they carried out a fundamental review of how these regimes are working. They have been in existence for some time, and in some places I understand that they are working reasonably well. However, there is a legitimate cause for concern about the working of this voluntary scheme in many parts of the country.
The Opposition's motion also refers to the need for home insulation. That is of fundamental importance to the long-term resolution of fuel poverty. Capital expenditure as well as revenue expenditure items must be taken into account when considering what should be done about home insulation. The Department of Energy has to be brought into the equation. The Department of the Environment is also involved. The Government have still not got their collective act together. There are difficulties over persuading departmental groups to work closely together in parallel and in sympathy with one another. New heating systems, new building standards, the fabric of buildings and insulation standards are the responsibility of the Department of the Environment. Fuel price policy and other related matters are the responsibility of the Department of Energy. Benefit levels are dealt with by the Department of Health and Social Security. However, there seems to be no proper co-ordination between the Departments. Co-ordination may be difficult to achieve, but the Government would reap considerable benefit if they applied more effort in that direction.
Some of the pilot projects that have been initiated by the fuel poverty campaign have produced real benefits. They have resulted in increased standards of insulation and in houses being built that can be heated at a cost that can be afforded. I could not afford, even on my relatively vast parliamentary salary, to heat some local authority and private houses in my constituency. These tenants and owners are actually heating fresh air. It goes straight up the lum, as they say north of the Border, and through doors and window frames that are not draught-proofed. Too many houses in my constituency—the Select Committee on Scottish Affairs looked into the matter in some depth—suffer terribly from damp. If I, as a parent, had to send a child of mine to bed in a damp mouldy bedroom, I should feel angry and that I was not doing my duty as a parent if I did not demand action to be taken. In the long term, it must make sense for the Government to increase capital investment in the infrastructure and fabric of our homes.
The Minister is too self-congratulatory. I have accused the Secretary of State on many occasions of beating his chest, and the Minister for Social Security is almost getting

into that same league. I hope that his promotion does not go to his head and lead him to emulate the worst habits of his chief.
Supplementary benefit rates have increased by 6 per cent. in real terms. However, I invite the Minister to consider the equivalent increases in energy costs, particularly the cost of types of energy used by those in the low income groups. I refer to hydrocarbon fuels such as paraffin and coal. If he compares those two rates of increase, I do not believe that he will come down on the right side of the cost advantage equation. A far higher proportion of the income of the low income groups is spent on the cost of heating their homes. The Minister did not refer to that fact, but the Government ignore it at their peril.
I understand what the Government have done about heating additions and about better targeting, but the Minister did not refer to the cuts in November 1984 when the available scale margin changes were applied to heating additions. That reduced the lower rate of heating additions from £2·10 to £1·10.
Many of my constituents were hopping mad when these changes were made. Cuts were again made by not increasing the heating additions in July 1986, by as much as they should have been. Furthermore the Minister did not refer in his speech, although the hon. Member for Oldham, West mentioned it, to the cuts in the central heating scheme that have been made recently. The Government do not have a great deal to crow about.
Leaving aside statistics, the anecdotal evidence is that the low wage earning groups and claimants on supplementary benefit are having far more difficulty and are struggling far more to meet their fuel bills than they were two or three years ago.
The Government's case rests heavily on achieving a low rate of inflation. That is obviously to be welcomed and it is extremely helpful, although I wonder whether that is the direct result of the Government's policies or whether the fall in inflation would have occurred to some extent in any case.
I am worried about what will happen after 1988. The Minister aids that all these heating costs would be included in the new income support scheme. I am less confident than he is about that, but it is an academic argument. We shall not have to wait long for the new rates, but I await them with trepidation. I do not see how the Minister, using the Green Paper indicative figures, will be able to set rates of income support necessary to cover those costs. The statement he made was an important statement, and he may find that it is thrown back at him in later years. Apart from the problem of income support, which replaces and includes heating additions and other supplementary benefit rates, the Minister has yet to announce the alternative system that is to replace the draught-proofing grants that are available as single payments at the moment. Some of us are also apprehensive and await with trepidation the details of that scheme.
There are very real worries about fuel poverty, and the Government must not be complacent—I warn the Minister against that. On balance, I am in a difficult position, being between the devil and the deep blue sea. If I recommend my hon. Friends to vote for the official Opposition's motion, it will not be on the basis of the costs that are thereby implied, but simply because the Government have not done enough.

Mr. Andrew MacKay: I do not wish to follow too far the arguments of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) except to say that he made a characteristically woolly speech, presumably concocted on the back of a cigarette packet during the afternoon. It was interesting that he did not reach any conclusions, except vaguely to say that he might be supporting the official Opposition motion. He wants to have his cake and eat it, as always happens with the Liberal party. He wants to support the Opposition motion, but he does not like its financial implications. He cannot have it both ways. He has to make a hard decision. However, as his party is most unlikely ever to be in office, he will never have to make these hard decisions.
It is a sad day for the House when Her Majesty's Opposition, as part of their Supply day, prey on the fear of the elderly, and quite unreasonably have made this issue extremely political, notwithstanding that, when I intervened in his speech, the hon. Member for Oldham, West (Mr. Meacher) said that he did not wish to talk party politics, but then did so. Those of our constituents who will read this debate tomorrow will feel that they have been ill served by the Labour party, which is causing so much concern and discontent when the facts it uses do not add up.
I followed the Minister's speech carefully. I noted that, during the term of the Government, supplementary benefit has risen in real terms by over 6 per cent. I see that heating additions have been extended by 159 per cent. at a time when fuel prices have gone up by only 117 per cent. Our electorate must think that is a good record. I noted that we have introduced and fine-tuned a severe weather allowance, something that never happened under the last Government. Some of us, unlike the hon. Member for Oldham, West, can remember that Government. He seems to have forgotten much of the time that he was a Minister, and has no recollection of the severe winters and the lack of action on this front. It makes his argument all the less powerful that so little happened when his party was last in power.
The number of people who are eligible for supplementary benefit has increased. Over 90 per cent. of pensioners are now eligible, as 70 per cent. in 1978 when the hon. Member for Oldham, West was a Minister. The excess winter mortality rate has fallen every year since 1979, as my hon. Friend the Minister pointed out, with one notable exception. This was the point that I made earlier, when the hon. Member for Oldham, West ducked out and said that he could not remember the figures. Let me remind him of them.
The winter of 1978–79 saw a higher level of excess mortality than any winter in recent years. The Labour party was in government and the hon. Member for Oldham, West was a member of that government. I remember sitting on the Opposition Benches during the winter of discontent and I remember full well that in my constituency cancer patients were being sent home to die because of industrial action by the National Union of Public Employees and the Confederation of Health Service Employees, supported, aided, and abetted by the Labour party.
If it is thought that the pensioners or the other sick and needy will have any benefit under any future Labour Government, one has only to refer back to that winter

when people died and suffered because of the industrial action by the people who are the paymasters of the Labour Party. The people of this country will be reminded about this in the election campaign, when it comes. They will clearly recall, what happened in that winter, and why the Labour party was kicked out. Memories of what happened will stop the Labour party returning to office.
My hon. Friend the Minister referred to the latest research, and to Professor Keating. I listened with interest to an interview in the "Today" programme yesterday morning when Professor Keating went even further. He said that he found that more people died of cold-related illnesses in centrally heated, warden-controlled accommodation than by themselves. These deaths resulted not just from hypothermia but from other cold-related illnesses such as strokes and heart attacks; here I agree with the hon. Member for Oldham, West.
Initially, I was amazed by Professor Keating's assertion, but he explained that when people are warm and comfortable they are more likely to go out and walk in the cold, and more likely to dress more modestly and suffer more. The problem is more complicated than it at first seems. With due respect to the hon. Member for Oldham, West, I feel more inclined to believe the evidence of an expert such as Professor Keating, from the London hospital, than somebody who is trying to get cheap political capital out of elderly people dying.
The Labour proposals are worth looking at closely. The hon. Member for Oldham, West, as the Opposition official spokesman on health and social security, said on 18 September this year:
We will also establish a winter premium of £5 a week for the months between mid-December and March for pensioners on low incomes.
When will that be implemented if a Labour Government are returned to power? That is an interesting question. The hon. Member for Oldham, West was mugged after making that statement, just as he was after making his comment about tax relief on mortgages, because other people on the Labour Front Bench have to watch carefully what the hon. Gentleman says and then correct him from time to time. It gives us great pleasure whenever the hon. Member for Oldham, West makes a policy statement. We were delighted when he was re-elected to the shadow Cabinet, because there is plenty of mileage in his comments and policy statements, as they never add up financially.
After being mugged, presumably by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) the hon. Gentleman wrote an article in The Guardian on 24 October. On this occasion he said:
All other social programmes, apart from my £3·5 billion package, are therefore implicitly conditional on such a time as and when resources become available.
That is called a wriggle. One makes the promise, gains the publicity, hopes to gain the votes and then quietly, in a little-read newspaper such as The Guardian, gets off the hook again. The hon. Member for Oldham, West was told to get off the hook by the right hon. Member for Sparkbrook, who was concerned because my right hon. Friend the Chief Secretary, in many telling interventions in the House and elsewhere, drove a coach and horses through the financial policies of the Opposition.
They have fallen into the same trap as the late Hugh Gaitskell fell into in the run-up to the 1959 election. They have totally failed to cost their programme. We are going to cost it for them again and again. Between now and the next general election we will draw the attention of our


consitituents to just how their programme does not add up financially. Those constituents know about good housekeeping and they know about promises that cannot be kept. It will do the Opposition grave damage.
The cost of the programme will be £150 million. We have no idea where the money is coming from, and I am certain that the right hon. Member for Sparkbrook has no idea how he will raise the money.
There is also the problem of the order books, which have been referred to by my hon. Friend the Minister. Presumably, they will have to be revised upwards in December and then they will have to be revised downwards at the end of March. That seems immensely complicated. It will be costly and will require a lot of extra work by the staff at the Department of Health and Social Security. When I speak to the excellent DHSS staff in my constituency and see the good job they are doing at the Bracknell office and the Slough office, which is just over my constituency border, I know that they will not be pleased by the extra burden. It is putting an unnecessary responsibility on them. It will be costly and, let us be honest, it will be quite unworkable.
We have the problem of pensioners. They will be very confused when their benefit goes up and then goes down again at the time that the annual increase in benefits will be taking place. Any policy that makes benefits more rather than less confusing for the elderly in the community has very little merit. I wonder whether the hon. Member for Oldham, West has bothered to think that out. I suspect that he has not, because this debate is all about emotion and gaining votes. It is not about looking after the people he professes to care about and who he believes are in so much difficulty.
How does one cover the 1 million pensioners who are not on supplementary benefit? As my hon. Friend the Minister said, will the Opposition assist the disabled, who suffer just as much in the cold? Will they assist young families on low incomes? They have not been mentioned. Presumably that would be on top of the £150 million. In my book, young families on low incomes are just as important as the elderly, and so are the disabled.
There is an issue that I think the right hon. Member for Salford, East (Mr. Orme) will want to deal with when he winds up the debate as the shadow energy spokesman. I am a little confused because I think that the Opposition Front Bench spokesmen are a little confused. I believe that the Labour Party has a non-nuclear energy policy. If it has, it will dramatically increase fuel costs and increase electricity costs. The people who will suffer the most are the very people being referred to by the motion.

Mr. Keith Best: Is my hon. Friend aware that the Labour candidate in my constituency has said that he does not believe that there should be a replacement to the Magnox B Wylfa power station—

Mr. Deputy Speaker: Order. A number of right hon. and hon. Members are waiting to take part in the debate. I hope that hon. Members will stick to the motion on the Order Paper.

Mr. Mackay: I note your point, Mr. Deputy Speaker. I will not pursue that line but, with your permission, I shall refer to the non-nuclear policy of the Labour party, which directly affects heating in old people's accommodation and elsewhere. I ask the right hon. Member for Salford, East, who is not in his place at the moment, to tell us how much

extra that will cost and how it is taken into account in the figures that have been mentioned by the hon. Member for Oldham, West.
I would like to know whether the right hon. Member for Salford, East has consulted the hon. Member for Copeland (Dr. Cunningham), as he seems to have one policy on nuclear energy while the rest of the Labour party has another policy. Before we reach any final conclusions, we will want to know where the Labour party stands. That is yet another extra cost that has not been properly worked out.
I believe that the conclusion we have to come to must be that the debate was initiated out of political malice and for political gain at the expense of those least able to protect themselves in the community. Nothing positive has been offered. It is doubtful whether the Labour party could produce the goods it is offering. It has not properly costed its programme and I believe that it will rue the day that it made those policy statements and introduced this important subject on a Supply day in such a partisan manner.

Mr. William O'Brien: I do not intend to follow the remarks of the hon. Member for Berkshire, East (Mr. MacKay) because I believe that he spoke about anything but fuel poverty. This debate—an important debate—is about fuel poverty. Even the Minister had little to offer the people who are suffering because of fuel poverty. We have had discussions on nuclear power and the comments of the Minister, but there was little from the Government as to how they will alleviate fuel poverty.
The motion hits at the heart of what is happening in the country. If Conservative Members believe that there is no problem, I suggest that they should start to take note of what is happening throughout the country, especially in constituencies in the north. I shall read from a local newspaper, the Ossett Observer, dated 21 November. It cannot be classed as a Labour party publication. The headline is:
Thousands die of cold in winter.
The article says:
More than 500 people die from hypothermia each year, according to official government figures. As many as 100 times that number die from cold-related diseases such as pneumonia, influenza and chronic bronchitis. Many more elderly people suffer the discomfort and misery of being unable to keep warm.
The newspaper quotes the Health Education Council, which says:
many of the difficulties arise from a low income".
Because of low incomes many older people over-economise on fuel.
The massive increase in fuel prices and general increases in standing charges have hit pensioners most severely. The comment was made that the lower paid have to pay more out of their income for heating than people on higher incomes. Many of the pensioners will be waiting for this coming winter with trepidation. It has been estimated that nearly 750,000 elderly people are at risk from hypothermia. Thousands of elderly people will die from cold this winter if it is as severe as last winter. Thousands more elderly people will die in exceptionally harsh weather, and even greater numbers will suffer unduly from the cold. In the first half of 1985, hypothermia killed nearly 20 per cent. more pensioners than it did in the whole of 1984. Among people over 80 years of age, the death toll


rose by 30 per cent. These deaths were tragic and preventable. I fear for old people this winter, and I am sure that many of my hon. Friends do also.
Reduced heating additions and the chaotic system introduced last year for paying heating bills in exceptionally severe weather contributed to enormous hardship for elderly people. The hon. Member for Berkshire, East and the Minister referred to what is happening at present and what they are doing to help people who suffer hardship and need heating allowances. I shall quote from a letter, dated 12 November, that I received from the DHSS in response to a question I asked about a matter facing a constituent in her 80s. The letter states:
Whilst living at… Wood Lane, Rothwell, Mrs. F was entitled to a heating addition at the higher rate because of a combination of ill-health and damp accommodation.
Following her move to her present address, on 19 April 1986, Mrs. F's heating addition was reduced to the lower rate because, although she still satisfied the health criteria concerning heating conditions, her new accommodation was said not to be damp.
This is the sting in the tail:
The reduction in Mrs. F's heating addition resulted in her level of supplementary benefit being insufficient to enable the Department to pay her water charges direct to the local authority. In view of this the water charges were added to her supplementary benefit and she was advised that from 14 April 1986 she was responsible for paying these charges…to the local authority.
In other words, this person is suffering in more than one way. She is an elderly, ill lady in her late eighties. This is the treatment she is receiving in 1986 under the Tory Government.
I call upon the Government to develop a comprehensive energy strategy aimed at encouraging more extensive insulation and improving fuel efficiency of heating appliances, and, at the same time, dealing with financial assistance to poorer consumers to reflect the real priority of fuel costs in household expenditure. I made the point earlier that people on lower incomes need more protection. More attention should be given to preventing that old lady from living in damp, draughty conditions.
From my constituency work, I am aware of the problems that high fuel prices and the threat of disconnection cause to low income families and pensioners. I want to see the following matters given serious concern, particularly when old people and children are involved. One of the previous speakers referred to the cutting off of services. In cases involving children and elderly people, consideration should be given to the abolition of the gas and electricity boards' rights to disconnect supplies for customers who get into debt. The right to cut off services, without reference to organisations or bodies who have these people's interests at heart, should be abolished. There must be an adequate income for everyone's fuel needs, particularly those who rely on state benefits, as was outlined by my hon. Friend the Member for Oldham, West (Mr. Meacher). There should be more efficient use of fuel by encouraging better insulation and less wasteful appliances and heating systems. I have outlined the direction that we ought to take in matters of that kind.
Members of the Labour party believe that fuel supply is a major issue, affecting millions of people. The number of people who cannot afford to pay for the heat and light

that they need is growing. This is outlined in many of the statements that we receive from Government Departments. Fuel is one of the basic, common commodities, such as food or housing, to which all of us have a right.
In the main, fuel poverty is caused by bad housing, expensive and inefficient heating systems and poor insulation, as well as high fuel prices and inadequate pensions and benefits. We have to take these matters seriously if we are to make any improvement in the conditions and living standards of elderly people in particular and poor families in general. This country urgently needs a policy for warmth, beginning with a massive conservation programme, led by insulation in council housing, the expansion of grants for private sector housing and industry incentives to save energy.
The Government have ignored the links between conservation and fuel poverty, although it is profoundly obvious that the efficient use of fuel in the long run will lead to lower fuel bills. It has been shown that 6 per cent. of fuel can be saved through energy conservation schemes, and slightly more can be saved in newly built properties, yet energy conservation has always had a low priority for the Government. That is why I welcome the establishment of the Energy Efficiency Office. Unfortunately, the publicity distributed by that office has no back-up. Grants for insulation and local authority initiatives have been undermined by the Government's public expenditure cuts.

Mr. Andrew MacKay: That is nonsense.

Mr. O'Brien: It is not nonsense. It has been demonstrated by the problems that local authorities are having in carrying out installations and draught-proofing properties because of the reduction in the HIP programme.
A more serious matter is causing extreme hardship for mineworkers and widows of former mineworkers. Many people in my constituency in particular, and throughout the Yorkshire region in general, are retired members of the mining fraternity and their widows, who are suffering fuel poverty. The application by British Coal of a callous and iniquitous agreement is denying fuel benefits to those widows and retired miners, many of them in their late 70s and 80s, and is putting them into the fuel poverty trap and at the mercy of the DHSS.
With the introduction of the British Coal agreement in 1983, fuel poverty has been caused to people who have given all their working lives to the coal industry. In their early years, those people worked in the pits to ensure that there would be no lack of warmth in their years of retirement. There is now fuel poverty in mining communities because of this immoral and rotten 1983 fuel agreement. Many retired miners are chronically sick and need help. It is poor reward for their hard work.
The Department of Energy has been pushing up the price of gas and electricity to provide more money for the Exchequer. This is nothing more than a form of taxation of those who can least affort it. I am calling for a freeze on, or even a cut in, fuel prices to help those suffering fuel poverty. If there is to be a genuine approach to the problem, there must be a standstill in fuel prices.
Now the Government have embarked on the privatisation of the British Gas Corportion. This holds out no hope that consumers will have the benefit of cheaper fuel. The price formula proposed by the Government will


not ensure that prices are kept down. There has been no assurance that standing charges will not increase by more than the rate of inflation. I am prepared to listen to Government Members who say that there will not be an increase in gas charges following privatisation—Sid says that this is the last day to buy shares—above the rate of inflation. I feel sure that no Government Member can give that assurance. The people who suffer fuel poverty have little to which to look forward following gas privatisation.
For the 3 million gas consumers on the lowest incomes, standing charges represent 30 per cent. of their expenditure on gas. There are constant lobbies by people who represent the aged, widows and weaker groups and urges that standing charges be abolished. That would be a step in the right direction to help the people in the poverty trap.
Rather than tax everyone with fuel prices, we need the positive investment of resources in energy efficiency measures for low income households. That is what the Labour party is committed to and what the next Labour Government will implement. I believe that the Labour motion offers extensive hope to the people suffering fuel poverty. It encourages the elderly, widows, the chronically sick and the disabled to believe that there is hope. Those who accept the Government amendment will not alleviate the poverty that people are suffering and fulfill the need for more warmth and help in their homes. I ask the House to support the Labour motion and give hope to the people who are suffering in the poverty trap.

Mr. Lewis Stevens: The hon. Member for Normanton (Mr. O'Brien) made points that were completely antagonistic to the basis of the Government's approach to elderly people and to those who suffer from the problems caused by fuel prices. He said that the Government had nothing to offer, as though there had been no help with grants and heating additions. He went on to say that the general idea was to keep fuel prices down, and that is true. Fuel prices have increased by about 118 per cent. while heating additions have increased by 159 per cent.
The hon. Member for Normanton mentioned standing charges. British Gas has reduced them by £1 a quarter. He went on about fuel price increases. In the past few years, electricity price increases have been lower than the rate of inflation. Because of the oil price drop, after the announcement of electricity price increases, those prices actually dropped. Prices have not been increasing at a fantastic rate. They have been kept under control. The hon. Gentleman complained about insulation and the progress in making more efficient heaters, as though the Department of Energy had done nothing. In the past few years, the Department introduced the Monergy programmes.

Mr. Winnick: The hon. Gentleman seemed to say that fuel prices have not gone through the roof but have, more or less, kept pace with inflation. That is not quite the position. In the seven years of the Tory Government, the increase in gas prices has been 135 per cent. and the increase in the retail prices index has been 80 per cent.

Mr. Stevens: The hon. Gentleman has made that point. This is the third successive year in which gas prices have increased by less than the inflation rate. In real terms, domestic gas costs less than it did in 1970.
Some of the elderly face difficulties in keeping warm. My hon. Friend the Minister explained the difficulties and said that it is not just a correlation between the temperatures in which they live and the higher death rates during winter. I think that hon. Members on both sides of the House accept that it is a complex problem. Unfortunately, there are elderly people who do not realise the temperatures at which they should keep their homes, even when they have the facility to do so. Elderly people need to be told through advertising how important it is to keep their rooms at reasonable temperatures. The hon. Member for Oldham, West (Mr. Meacher) referred to people living in temperatures of less than 60·8 deg F. Some old people do not realise the importance of keeping themselves properly warm.

Mr. Lofthouse: Does the hon. Gentleman realise that many old people recognise that they need heat but are frightened to put their heaters on because they cannot afford to do so? They know full well that standing charges are often much higher than the charges for the gas that they have used. Is there not a case for abolishing standing charges?

Mr. Stevens: As the hon. Gentleman knows, that case has been made often, and early-day motions have been tabled on the subject. I was thinking about a particular group of people who do not recognise the importance of heating.
The important point has been made that some elderly people go out ill-equipped into inclement conditions. Education, especially with the help of social workers, is important. Draught exclusion has been a great help to many people. In my area the DHSS has easily been convinced of the need for it. It has carried out draught exclusion comparatively easily and quickly. Many old people probably do not realise that those on supplementary benefit can receive help in order to get such jobs done. They need to know more about such things. Although television advertises the importance of insulation, many elderly people still do not take advantage of what is available.
It was again said that the Tories do not really bother and that we disagree with the Labour party, but we care. The Government have extended heating additions to age groups and to people who were not eligible under the previous Labour Government. It is remarkable that all 65-year-olds on supplementary benefit are now eligible for heating additions. We have extended the provision to many disabled people and to people on supplementary benefit with children under five. That is a definite improvement and a help to those on low incomes.
The Government have done much. We have pointed the new system of allowances for extreme weather conditions in the right direction. It is targeted on the areas and groups of people most in need. That is where the help should go. It is right that Scotland and the north, which are much colder, should benefit rather than areas in the south where the climate is milder. Even if another Government introduced some other arrangements—we hope that it will be a long time before we have to worry about that—the emphasis should still be put on those areas which have the coldest weather and where the inhabitants need a higher heating addition.

Mr. Ernie Ross: The hon. Gentleman said that the allowances should be targeted on areas of


need. He suggested that if the scheme was introduced, people in Scotland might be helped. Does he realise that if the scheme had been operated last year, only three out of the 14 areas in Scotland would have received any benefit. My area would have received no benefit whatsoever, yet some of my constituents in Dundee have paid for an entire month.

Mr. Stevens: It is right to go not for the flat rate system which has been advocated, but for one based on differentials. This subject is treated far too emotionally by the Opposition. Within the old social security system there were moves to give help. Help has also been given under the new social security system. The hon. Member for Oldham, West (Mr. Meacher) has dismissed, as he did in Committee, the suggestion that the heating allowances would be assimilated into the income support scheme so that it was paid automatically to those on supplementary benefit. Because it was not shown separately, it was assumed that it would not exist, but surely that is a much simpler and more sensible system to introduce than one that has many "ifs" and "buts" and additions about qualifying under certain conditions.
It is to the Government's credit that, during this Parliament and the previous one, they took action on energy efficiency and widened the scope of the heating additions. They introduced a scheme which gave much greater help to the elderly, and consequently the elderly are confident that measures have been taken to improve their lot.

Mr. Robert Litherland: My hon. Friend the Member for Oldham, West (Mr. Meacher) informed the House that last year was the severest winter for 40 years. That, combined with the miserly pension increase approved by the Government, against a background of a rising number of deaths from hypothermia among the elderly, led to a demand for an additional heating allowance of £5 a week. We and the pensioners' associations say that that payment should be automatic.
It was said that the Government had sole responsibility for pricing gas and electricity. They price those fuels beyond the means of the most vulnerable people, those on benefits. How can Ministers justify accumulated profits of £635 million from electricity and £651 million from the gas industry? As has been pointed out, those profits are a hidden tax. The White Paper on public expenditure reveals that in the three years to 1987–88 British Gas will pay the Treasury £2·9 billion in gas levy and corporation tax. The financial targets set for the electricity boards require them, in the next year, to pay £386 million net to the Treasury. Therefore, the poorest once again must bear the burden. As I have said, it is a hidden tax.
The cost of heating and lighting a home has increased at an incredible rate. Yet those industries can show huge profits and the Government, with their policies, urge competitiveness and push up the cost of fuel. The money, however, is not used to the benefit of those most in need. In a letter to me, the Prime Minister wrote:
We are already giving considerable help to pensioners through the supplementary benefit scheme… You have referred to the elderly using more fuel last winter due to the very cold weather. Help towards these extra costs was in fact

available to supplementary benefit claimants during that cold spell, and payments were made throughout Great Britain with the sole exception of Lerwick, Shetland.
How can a Prime Minister be so complacent when so many people died of cold-related illnesses last year? In her reply to my question on this subject during Prime Minister's Question Time, when I requested that the £5 should be given automatically, her first word to me was an emphatic no.
Despite the mounting evidence that the poor cannot pay to heat their homes, despite the inescapable evidence of the rise in the number of deaths during the winter, and despite coroners' reports of accidental death due to hypothermia, which I have never accepted because those deaths are the responsibility of the state as they could have been prevented——

Mr. Terry Dicks: Rubbish!

Mr. Litherland: I hope that no one in the hon. Gentleman's family has to suffer.
Despite all that, the Government will throw only a few miserly crumbs, which will evidently appease the consciences of the Prime Minister, the Government and their cohorts on the Back Benches. They can enjoy Christmas and feel cleansed as they attend religious services, secure in their minds that pensioners are well looked after and that perhaps not so many will die this year, and comforted by the fact that it will not be members of their families that could suffer the indignity of freezing to death like the lady in Blackpool last year. She was so cold when they found her that they could not even take her body temperature. The Conservatives can shout, "Rubbish."
Those Conservative Members are comforted by the knowledge that none of their families will suffer the humiliation of their electricity supplies being disconnected. Indeed, 125,000 households had their electricity supplies disconnected, according to the most recently available figures for a 12-month period. A survey of those who had been disconnected discovered that 90 per cent. of those households fell within the definition of hardship.
I have received correspondence from, among others, the Pensioners and Trade Unions Association, which says that there is nationwide indignation because of the number of deaths among the elderly last winter. The consequent pressures exerted by the churches, by social and political figures and by campaigning pressure groups has forced the Government to move—not a lot, but at least they have moved.
However, the announcement by the DHSS of the proposed heating allowance of £5 per week for those on supplementary benefit is so hedged with conditions that many of those in need will not receive allowances. Pensioner organisations are convinced that, in many cases, by the time benefit is received it is too late to avoid hypothermia. Waiting for the temperature to drop an average 1·5 deg C below freezing before paying out heating allowance is an insult to the intelligence of anyone who is aware of the problems affecting elderly people during the winter period.
There are a great number of elderly people in my constituency. In 1984, figures showed that there were 82,700 pensioners in the city of Manchester—18 per cent. of the population. Not all elderly people are poor—I recognise that—but clearly many are on very low incomes. By December 1984, 23,800 were receiving


supplementary benefit and a further 23,400 were receiving standard housing benefit. That represented 57 per cent. of Manchester's pensioner population. When one takes into account the non-take-up, it is likely that over 80 per cent. of the city's pensioners are receiving or are entitled to receive means-tested welfare benefit. That is higher than the national average. National statistics suggest that the most vulnerable group of elderly people is that living alone. A survey in 1983 showed that 54 per cent. of that group were primarily dependent on state benefit.
We recognise that it is not just the elderly who suffer—that is recognised in the debate. I receive many letters from constituents who cannot afford heating costs and who have reverted to other kinds of heating such as paraffin stoves. Such stoves are used to heat accommodation or to dry out washing, and they cause condensation which in turn causes ill health; they also cause the fabric of the accommodation to deteriorate. All that is costly.
For my sins, I sat on Manchester city council and on the fire brigade committee. In that time, I saw photographs of fires in homes which had used paraffin stoves. They showed the charred remains of the bodies of children whose chest cages had been burnt open by fire and intense heat. The only item which remained in the charred rooms, in perfect condition, was the paraffin stove which had caused the disaster. Despite all this, the Prime Minister says no.
Tonight we have bandied statistics about. We have discussed percentages and numbers, but these are not mere figures, these are people. How can we expect understanding from a Prime Minister whose heart is permanently below freezing point? We have appealed to Conservative Members to come into the Lobby with us tonight but, I am afraid, once again like sheep, they will follow the leader.

Mr. Derek Conway: I have no doubt that the hon. Member for Manchester, Central (Mr Litherland) spoke with compassion and sincerity, but, sadly, the hon. Gentleman pushed himself into a corner which is far from reality. Many of the words addressed to my right hon. Friend the Prime Minister could equally have been addressed with the same amount of compassion and sincerity to his right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) when he presided over the last Labour Government. To quote individual cases, as the hon. Member for Manchester, Central did, is unjust to the debate. Although those tragic cases cause great sadness to the families concerned, there is no doubt that such tragedies occur under Governments of all political persuasions. Therefore, to try to use them as a political stick with which to beat the Government is beneath the hon. Gentleman.
In Shrewsbury, elderly constituents who have come to me suffering hardship and fuel poverty have found the local DHSS offices superbly helpful. I hope that my hon. Friend the Minister will take note of the fact that the offices are extremely helpful—often under difficult conditions—and the vast majority of the general public, despite the occasional headlines in the cheaper papers, believe they do a first-rate job. I agree with that. It is sad that the debate, which could have made a constructive contribution towards helping the elderly and conserving energy, has deteriorated into pork-barrel politics. I suppose that that was inevitable.

Mr. Stanley Orme: Why?

Mr. Conway: If the right hon. Gentleman had been in his place throughout the debate, he would know why. Instead, he has chosen to slip into the Chamber towards the end of the debate and chip in from a sedentary position, which is beneath him.
The debate started on a bad note, and that was the position from the moment that the motion was placed on the Order Paper. Things went from bad to worse because we were faced with an inaccurate motion. The hon. Member for Oldham, West (Mr. Meacher), who moved it, was shown to have "facts" which were completely wrong.
My hon. Friend the Minister for Social Security made it clear that the trend in excess winter deaths has been downward. From 1961 to 1965, winter deaths were 52·3 per cent. In 1966, they had been reduced to 39·6 per cent. There was a further reduction between 1971 and 1975 to 28·2 per cent. Between 1976 and 1980 they jumped to 33·6 per cent. As the hon. Member for Oldham, West has been reminded again and again tonight—we shall not let him forget it because he was a DHSS Minister at the time—the highest number of winter deaths occurred in 1978–79. That peak was not reached when a "wicked Tory Government" were in power. That cannot be said by any stretch of the Opposition's imagination. Instead, that happened under a Labour Government.
The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) has represented the alliance in the Chamber for part of the debate. He has been the only alliance Member present, and often the Chamber has been empty from an alliance point of view, which demonstrates its great concern for the elderly and for fuel poverty. It is a fact that the alliance supported the Labour Government who were responsible for the appalling record to which I have referred. We have heard this evening—this was after he had used a great deal of cotton wool—that he will join the Opposition in voting against the Government when the Division takes place.
It seems that alliance and Labour Members cannot separate themselves. In Shropshire we call supporters of the alliance Laberals. The Labour and Liberal parties are indistinguishable in their actions and the Liberals have a shameful record in supporting Socialism in the Chamber. It is sad that they intend to do so this evening. As I have said, the trend in winter deaths is downwards, and that cannot be denied.
It is a fact that the 1·7 per cent. increase in the price of gas from 1 May was the first increase for 15 months, and it was well below the rate of inflation. Many hon. Members on both sides of the House feel that the standing charge has outlived its time, but it should be remembered that it was reduced by £1. We know that electricity prices have been increased by 4·7 per cent., but that increase followed three years when the total increase of 6 per cent. was well below the general rate of inflation. That has had a serious effect on pensioners, to their betterment.
When we think about standing charges we experience an initial gut reaction. We feel that they are unfair and should be abolished. I think that that is the initial reaction of most of us, but we must consider the knock-on effects. It is so easy to say, as Liberal and Labour Members have said this evening, "Abolish this, do that and do the other," but every now and again, as the right hon. Member for


Birmingham, Sparkbrook (Mr. Hattersley) is proving to members of the shadow Cabinet, it is necessary to consider the financial effects for the nation.
If we abolish standing charges, unit charges will unquestionably be forced up because the money has to be raised from somewhere, and the estimated cost of abolition is £550 millon a year. Where will that sum come from? Will it come from the magical pocket of the Leader of the Opposition, no doubt to be paid in dollars?
For pensioners, the knock-on effect on unit charges will be an extra £300 million per annum. The pensioners should not be fooled into thinking that the Opposition offer them great glory to come. Behind their easy words in the Chamber tonight lie serious knock-on effects for their unit charge payments.
I hope that we shall hear from my hon. Friend the Minister something about the progress that has been made in energy conservation. A considerable effort has been made to ease the life of pensioners, especially in this regard. The Department of Energy has made available project start-up grants to help voluntary insulation programmes. The record of progress on that score is worth trumpeting in the Chamber and throughout the country.
The Department of Energy is a major source of finance for the neighbourhood energy action programme, which is successful in my constituency, as it is, no doubt, in other constituencies. I hope that we shall hear more from my hon. Friend the Minister about the Department of the Environment's home insulation scheme. I appreciate, of course, that he will not be speaking for that Department this evening. There are home insulation grants of up to 90 per cent. for loft insulation, and these are effective in helping pensioners retain the value of their heat expenditure. The considerable growth in the full cost of draught-proofing materials through the DHSS single payment scheme is important. There has been an 80 per cent. increase this year alone.
There have been many crocodile tears and, sadly, false words tonight about the Government's true record. But the fact remains, as the electorate will have pointed out to them time and time again, that £11 billion more has been spent on benefits by this Administration, not out of their money or the Prime Minister's money, but out of taxpayers' money. There are higher rates now than ever before, and that cannot be and has not been challenged by the Opposition Front Bench. That money is not all going on unemployment, which is the easy claim in the newspapers. Only £4 billion of that £11 billion is directed towards the increase in unemployment, while £1·75 billion goes to pensioners and £1·5 billion to benefits for the long-term sick and disabled. There is a £4 billion—6 per cent—increase across the board.
The Opposition's motion tonight, supported by the Liberal and Social Democratic parties—they have not been in the Chamber, but no doubt they will turn up in the Lobbies—is too easy and glib a promise. The £5 a week benefit referred to in the motion would cost £150 million a year.
Some of my hon. Friends have asked whether the right hon. Member for Sparkbrook has been advised of that. His colleagues in the shadow Cabinet promise more with every hour that passes. As his name is on the Order Paper,

no doubt he will be looking forward to accounting for that extra expenditure when my right hon. Friend the Chief Secretary challenges him about it.
Apart from the purely financial effects, the proposal will mean pension book chaos. The pension will be going up one month and coming down two or three months later. In addition, there will be the annual increase, which is now due in April. Pensioners will be backwards and forwards with their pension books and will not know where they are. Tremendous chaos will ensue. The pressure on our DHSS offices will be considerable, and that will hinder them even more from looking out for the special cases.
The hon. Member for Roxburgh and Berwickshire made a moving speech in support of the Labour party's policy of a payment of £5 per week, and then went on to talk about the problems of young children in a cold environment. However, the Labour party's policy, which he and his colleagues will support tonight, makes no mention of that. It does not say that it will do anything at all for the under-fives who are presently supported by the Government's policy, nor, indeed for the disabled.
What we do know is that, as a result of the Labour party's spendthrift policies, inflation will undoubtedly return and we can look forward to the sort of fuel conservation that is practised by Mr. Arthur Scargill and his cohorts as they stockpile.
Undoubtedly, the Labour party's motion is one of pork barrel politics: think of a figure, double it and hope that the electorate will be stupid enough to accept it. But they will not be, and we know that only to well. They will look at the figures—as all the surveys now show that they are doing—and the promises being made to them with doubting eyes. Instead, they will look to the Government's record, which stands scrutiny. They will look to the record of previous Labour and Liberal Governments which stands for shame. I hope that the amendment will be carried tonight.

Mr. Gordon Wilson: The hon. Member for Shrewsbury and Atcham (Mr. Conway) and the Government are deceiving themselves if they think that fuel poverty and fuel allowances will be ignored by the electorate. It took last winter, with the strange inversion of temperature that caused the severe weather allowance to be triggered off in the south initially, but not in the north, to direct a lot of attention to the issue of climate and how it impacts upon fuel poverty.
During the debate there has been little reference to the impact which climate can have on people. Earlier, I said that Scotland has a longer winter, a harsher climate and lower temperatures than elsewhere. Therefore, in practical terms, the cost of heating a house will be 30 per cent. more in Aberdeen than in Bristol. It is hardly surprising that 25 per cent. of hypothermia deaths in the United Kingdom are to be found in Scotland. The Government have been criminally complacent in the way in which they have approached the issue.
The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) was correct to direct attention not just to those who, unfortunately and sadly, die because of the inadequate level of heating allowances, but to the hundreds of thousands of elderly who are affected by discomfort caused by being unable to heat their houses.
I have had experience of discussions with Ministers in which they took the very sophisticated argument that because the family income surveys did not show increased expenditure on heating, there was no need to supply money for heating. The fact is that many elderly people are scared burn fuel during the winter months because they do not believe they can afford to do so. As a result, they live in conditions of extreme discomfort and there are cold related illnesses and, unfortunately, deaths.
There has been much hypocrisy from the Labour party during the debate. The hon. Member for Oldham, West (Mr. Meacher) was a Minister for Social Security and admitted, after leaving office, that he bitterly regretted having suppressed information about the effect of hypothermia. My former colleague Mrs. Margaret Bain was very active on that score then.
In my research on this matter I came across articles that are horribly reminiscent and show just how little improvement has occurred. An article in The Times on 6 February 1976 stated:
A state of war in the Government has been declared this week by the voluntary agencies campaigning for a cohesive policy to stop the mounting toll of deaths from hypothermia among elderly people and the prospect of young babies being irreparably damaged by the cold.
The Department of Health and Social Security under a Labour Administration decided around 1977 that the minimum recommended room temperature for old people of 70 deg F should be discontinued and thereafter the DHSS would make no recommendation. We have to judge the Labour party's proposals for a £5 a week winter premium against that background. That is better by far than the Government's proposals.
I made the point to the hon. Member for Oldham, West that that form of flat rate payment is discriminatory in its approach. It means that those who live in the south, who require less heating for their homes and who have more money left for food and clothing, will receive the extra premium. I do not object to that. However, no extra sum will go to those who live in the colder parts of the United Kingdom who also have to sustain longer winters. The period from mid-December until March does not cover the Scottish winter which runs from November until the end of April. That must be corrected. Should the Labour party be in power after the next election, the Labour Government will have to revise that scheme as it would cause a tremendous amount of dissatisfaction in Scotland.
The new severe weather allowances introduced by the Government amount to no more than a con trick. It is particularly depressing that an elderly person can be refused any payment even during severe weather, because he as £500 or more in a bank account. The Minister must accept that £500 is very close to the cost these days of an ordinary funeral. The elderly have a great respect in these matters. They do not wish to die and be buried in a pauper's grave. They would therefore prefer to go without heating so that their savings will be available when they die.
There is also a problem in relation to the unemployed who are struggling to keep their families warm. As I understand it, under the new arrangements, children over the age of two pass the cut-off point and the fuel allowances will not be available to a family who would otherwise qualify if the child was under two years of age. That is very harsh.
I cannot accept as a pretext or excuse for delay the much delivered quotation of Professor Keatinge that people in sheltered housing and warm conditions have a similar rate of death to those who live outside that accommodation. Research could take ages. Why is it that Scandinavians, Americans and Canadians who have adequately insulated houses and a high fuel allowance do not die prematurely during the winter months as we do? Why do the Government not make available money now and an adequate programme to insulate houses to a proper degree of warmth?
Both the Government and the Opposition have failed to take account of two factors that arose in the 1970s—the poor quality of housing erected in the 1960s which was inadequately insulated—concrete shells—and the savage increase in fuel costs. The Government's proposals are entirely useless. They may be slightly better in theory than the previous severe weather allowances which gave more comfort to the south than to Scotland, but when the figures are totalled, less money will be available to people living in Scotland for heating allowances this year than last year. That is the acid test and by that standard the Government have failed.

Mr. Stanley Orme: The debate is taking place at a most appropriate time as it is the end of Energy Efficiency Year and shortly after the week of action on cold homes. I shall deal with the responsibility of the Department of Energy, which overlaps into that of the Department of the Environment.
The Government have ignored all the evidence from last winter. As has been stated, during the first three months of 1986 there were 578 hypothermia-related deaths in Great Britain. International comparisons show that the British people suffer more in cold weather than people in other countries with similar or colder weather conditions. Both sides of the House should examine that and what can be done about it. Yet the Secretary of State for Energy appears to believe that there is no such thing as fuel poverty. He prefers to believe that it is the same as clothes or food poverty as that would absolve him from taking any initiative to deal with it.
Fuel poverty is more complex and covers a range of issues. Certainly it is about a lack of income, but it is also about poor housing conditions, inappropiate heating systems and a lack of insulation or draught proofing. Evidence shows that the elderly and low-income households live in poor housing conditions, often lacking the basic amenities, and in the coldest homes. Such families are also less likely to have central heating systems and adequate insulation in their lofts or cavity walls.

Mr. Powley: I accept entirely the right hon. Gentleman's point about the importance of loft insulation. Is he aware that, despite the Government's allocation of sums to local authorities for home insulation schemes, in each of the past five years local authorities have underspent considerably, sometimes by as much as one third of the sum allocated? Does he agree that they should make greater efforts to use all the resources available? Obviously, we would all like more, but local authorities do not even use 100 per cent. of the resources available.

Mr. Orme: I take the hon Gentleman's point and I shall deal with it. The Government are responsible for ensuring that these resouces are available; I shall say something further about that.
I represent an inner city. In part of my constituency the people are extremely poor and there is high unemployment. People who come to see me and who have, for example, underfloor heating or some form of central heating or who have to pay for electricity through a meter, tell me that they do not use heat because they cannot afford to use it. Consequently, they suffer from the cold and tell me about going to bed early during the winter because of the cold. Surely, in an energy-rich nation like ours, resources which are so essential should be available.
On Monday morning there was a doctor on the "Today" programme on BBC Radio 4—if I dare to mention that in this House. He said that perhaps it would be cheaper for the Government to allow some of the people suffering form cold to go to Spain during the winter because that would relieve the problem of hypothermia. He made the point that our housing was deplorable. For instance, there are no figures for hypothermia in Iceland, Norway or Finland or in any part of Scandinavia. People there do not die from cold, because their homes are properly insulated. The Government should turn their attention to that, because it is a priority matter.
The need for improvement to our housing stock is becoming increasingly urgent. The forecast expenditure by local authorities—I am coming to the point made by the hon. Member for Norwich, South (Mr. Powley)—for 1985–86 on heating and insulation improvements was just £193. That is a far cry from the estimated £4 billion that is needed. If a priority programme for home insulation was created and made a national campaign by the Government, not only would it insulate homes but it would create needed jobs. I have seen such schemes in Newcastle upon Tyne. One estimate shows that 50,000 jobs could be created by that type of expenditure. Surely expenditure of that sort would be much better than money spent on tax relief, which is what the Government are considering for the future.
All these problems lead to fuel disconnections. Difficulty in paying for fuel and the accumulation of debt are major problems, especially for low income families with children. A study of families on supplementary benefit concluded that paying for fuel is the greatest problem they face. The hon. Member for Newcastle upon Tyne, Central (Mr. Merchant) took a week living on unemployment benefit to accept that this is the case for millions of families. He made a point about the cost of fuel, even with that very short experience.
In the year to 31 March 1986, there were 138,000 disconnections of either gas or electricity. Increasingly, families are unable to afford to have their supplies of heat and light reconnected. Some 23,000 households are without fuel for over three months. In our present society, that is a disgrace.
The Government have made no concerted attempt to tackle these problems. Their policies are marked by a lack of co-ordination. The gas and electricity authorities have made huge profits. Last year, the gas levy was over £600 million, without profits, and very high profits have just been made by the electricity authority. John Edmonds, the general secretary of the General, Municipal, Boilermakers and Allied Trade Union referred the other day to the privatisation of British Gas and said that it would be far

better if the price of gas were reduced by 10 per cent. for those who need such a reduction. I underline that comment.
This year, 1986, is Energy Efficiency Year. We have been bombarded with glossy advertisements that exhort us to conserve energy. Those who are most in need of help should have their homes insulated and draught-proofed. They should also have new heating systems. These measures would enable them to have energy-efficient homes. However, they have not benefited from the Government's programme. The Department of Energy exhorts us to insulate our homes, but the Department of the Environment reduces the amount of money in the reserve fund available for this programme. That happened right at the beginning of Energy Efficiency Year. The local authorities in Glasgow, Edinburgh and Stirling, some of the coldest places in Britain, have run out of money for home insulation grants. They are able to claim additional funds, but they have not been told that they can do so. I ask the Minister to answer that point.

Mr. Powley: Will the right hon. Gentleman give way?

Mr. Orme: No. There are only five minutes left to me, and I have some important matters to put before the House.
It is a shame that the Government have not delivered the resources to back up their advertising campaign. Not only the Department of the Environment overlooks the work of the Department of Energy; so does the Department of Health and Social Security. The Department of Energy has produced a breakdown of those areas in Britain that are colder than others. For example, it considers that the Pennines are averagely cold and that the north-east of Scotland is 20 per cent. colder.
The Minister used a most interesting phrase: "absolute coldness". What does that mean? The Department of Health and Social Security does not seem to be aware of it. It has a completely different basis for severe weather payments, which makes it far less likely that it would have to pay out. The solution to these problems is outlined in the Opposition's motion and it has been dealt with by my hon. Friend the Member for Oldham, West (Mr. Meacher) and by other right hon. and hon. Friends.
There should be a statutory code of practice relating to disconnections. The Government know that the Opposition referred to disconnections in Committee on the Gas Bill. We understand that the final decision over disconnections rests with the authority, but before disconnections take place, statutory authority should be obtained. While it is being obtained, other means should be found to assist those who have difficulty in paying their bills.

Mr. Eric Cockeram: Will the right hon. Gentleman give way?

Mr. Orme: No. The Labour party is committed to the introduction of such a code and it will do so at the earliest opportunity.
As for the neighbourhood energy action campaign, I pay tribute to Newcastle upon Tyne, Glasgow and Hull, which have led this campaign. They are all Labour authorities. It should be noted as such. Such a programme, if we were to develop it on a national scale, would create warm homes and many thousands of jobs.
Our motion shows the House and the Government the central issues facing thousands of people this winter. The


Government could assist, by implementing our motion, which is modest in its proposals, but if they are not prepared to implement it, they should explain why. We believe that it could be done now, and the Government should be tackling these problems. We shall return to this issue time and again.

The Parliamentary Under-Secretary of State for Energy (Mr. Alastair Goodlad): I must confess to having read with disbelief the Opposition's motion for the evening's debate. The Government are criticised for the alleged inadequacy of the system of exceptionally severe weather payments, yet the motion completely ignores the Government's excellent record in providing help through the social security system. The motion seeks safeguards to protect pensioners from disconnection, but entirely ignores the code of practice which already provides pensioners with general protection against disconnection and with specific protection from 1 October to 31 March each year. The motion calls for a major programme of home insulation, but overlooks the fact that there is already a major programme that utterly dwarfs anything that existed when the Labour party was in power.
The hon. Members for Roxburgh and Berwickshire (Mr. Kirkwood) and for Manchester, Central (Mr. Litherland) and the right hon. Member for Salford, East (Mr. Orme) mentioned disconnections. These remain steady at just over 0·5 per cent. of average domestic electricity credit consumers and just under 0·25 per cent. for gas consumers.
Both industries operate a code of practice, monitored by their respective consumer councils, to safeguard from disconnection genuine cases of hardship. The industries make the maximum effort to handle constructively any failure to pay bills and its consequences. Both industries operate schemes to enable consumers to pay off debt or to avoid getting into debt, such as budget payments, installation of prepayment meters, which can be calibrated to recover part debt, and saving stamps.
The code of practice has already been reviewed and revised twice by the industries to keep it up to date and to take account of changed circumstances. In addition, its operation is monitored by the gas and electricity consumer councils.
The Policy Studies Institute, When it reviewed the code in 1981, thought that many of those disconnected had been in arrears for some time during which they could and should have obtained help under the code. The review concluded that the statistics show substantial patience displayed by the industries, especially the gas industry, in the face of persistent non-payment by their debtors. The statistics also show that there are very few elderly households among debtors, and even fewer among those who suffer disconnection. Only 1 per cent. of the disconnections studied were in pensioner households.
The hon. Member for Oldham, West (Mr. Meacher) mentioned, albeit with an understandable measure of diffidence, the subject of energy efficiency in the home, as did the hon. Member for Normanton (Mr. O'Brien) and the right hon. Member for Salford, East. The right hon. Gentleman is not always diffident, I grant him that. I have no hesitation in saying that the Government have done vastly more to promote energy efficiency in the home—in other words, to tackle at source the problems that we are discussing—than the Labour party ever did.
Let me remind the House what we have done, which has made a massive difference to the lives of a large number of people. We have encouraged loft insulation through the homes insulation scheme and improved the help that the scheme gives to low-income households. [Interruption.] There is nothing particularly funny about low-income households. We have supported neighbourhood energy action and the voluntary sector insulation projects.

Mr. Allen McKay: Can the Minister give an assurance that the schemes which are undertaken by community projects for the elderly and people on social security benefits will continue as they are now, even when the Social Security Act 1986 comes into effect?

Mr. Goodlad: I shall come to those important points in a moment.
The Energy Efficiency Office has developed a comprehensive range of publications to provide the domestic householder with objective advice, much of it relevant to low income households. Energy Efficiency Year, and the associated Monergy campaign, represent the biggest campaign ever aimed at improving the energy efficiency of the domestic sector, including low-income households.
The Government are again reviewing the thermal insulation standards in the building regulations to ensure that new homes are built to better standards. The Government are also working with the British Standards Institution to encourage the voluntary adoption of higher standards.
The Government have provided 2·5 million grants under the homes insulation scheme to encourage householders to carry out two of the measures—loft insulation and hot water cylinder insulation—that are most cost-effective even without a grant. In view of the subject of this evening's debate I should remind the House that it was this Government which, in 1980, extended the homes insulation scheme to provide enhanced grants at the 90 per cent. level for the elderly on low incomes and which, the following year, extended the 90 per cent. grant to the disabled on low incomes.
Both those groups also benefited from the Government's decision in 1984 to extend the scheme to provide "topping up" grants for those with less than 30 mm of existing insulation. In the six years since 90 per cent. grant was introduced, over 420,000 households on low incomes have been helped, either through a grant for initial insulation or through one for topping up their existing insulation. That, I would suggest, is an achievement of which the Government are justifiably proud.
One of the most remarkable success stories of the past few years is the growth of the voluntary sector insulation projects. I know that the whole House will want to congratulate David Green and Robert Davies, who set up the first project in Durham as long ago as 1975. But the sad fact is that, by 1980, the total number of such projects, despite the attention of the Opposition, was less than half a dozen. In 1981 the Department of Energy stepped in with its programme of active support of those projects. The projects provide a low cost or free basic insulation service to low income households, and they are able to do that because they bring together several types of Government finance.
The Department of Energy has provided seedcorn and project grants to enable voluntary organisations to plan projects, and to buy a van, tools and initial stock of materials to start up work. It is also the major source of finance for neighbourhood energy action, the national co-ordinating body.

Mr. Allen McKay: Will the hon. Gentleman answer my question?

Mr. Goodlad: I shall answer it in a moment.
The labour costs are met through the Manpower Services Commission's community programme for the long-term unemployed. [Interruption.] Hon. Members may not like hearing this, but they are going to hear it.
Materials costs are met through the Department of the Environment's homes insulation scheme, which provides grants of up to 90 per cent. for loft insulation, and through DHSS single payments, which pay the full cost of draught-proofing materials for qualifying claimants on supplementary benefit.
Since 1981 the expansion of those projects has been dramatic. From five then, the number increased to 60 at the end of 1983 when the Energy Efficiency Office was set up. The number of projects then doubled in 1984 from 100 to 200, and in 1986 there has been an 80 per cent. increase to nearly 340. A further 200 projects are at the planning stage. They already employ over 5,500 people, and they have treated over 230,000 homes—about 100,000 in 1986 alone. That means that well over 250,000 people on low incomes—many of them pensioners or disabled—have been made warmer and more comfortable by the work of the projects. That is, I would suggest, an excellent example of the Government and the voluntary sector working together. It is also an excellent example of several Departments working together towards a common objective. The total cost to public funds of the various kinds of Government funding for these projects is, in fact, about £30 million annually.
The Energy Efficiency Office produces and distributes a wealth of material on the basic measures that all householders should take, in their own interests, to reduce their energy bills or to live more comfortably. New publications in Energy Efficiency Year include the Monergy guides on cutting home energy costs, the Monergy fact files on the seven basic measures, and Monergy news for general interest articles. These publications are in addition to the high profile television and press advertising campaign. On the future of the voluntary sector insulation projects, I am glad that hon. Gentlemen value so highly the schemes brought in by the Government which they did not bring in themselves.
Following the social security reforms in 1988, my right hon. Friend the then Minister for Social Security assured the House in February that he would wish to be assured that there were adequate alternative arrangements to enable the work on these projects to continue. Gas prices after privatisation have been mentioned. As the House knows, these will be strictly controlled by a formula which will protect the customer. The formula will discipline the company to achieve savings in the onshore costs under its control and will ensure that customers share in the benefit.
As has already been mentioned, gas standing charges were reduced by £1·00 this year. Following privatisation, British Gas will be required, under the terms of the

authorisation, not to increase standing charges by more than the rate of inflation. This is not an assurance; this is a requirement.
Standing charges are the fairest way of recovering those fixed costs to which every consumer gives rise—meter readings, accounting and billing, and emergency services. For these reasons, standing charges are favoured by the industry's consumer councils and have been recommended by the Council of the European Communities for general adoption. To abolish them would cost for each industry £500 million. The lost revenue would have to be recovered through higher unit rates, penalising those who need more warmth, such as the very old, the young, the sick and the disabled.
Successive Governments have concluded that concessionary tariffs, including the abolition of standing charges, would not be a sensible way of helping those in need. In 1976, when announcing the then Government's response to a review of the scope for helping poor consumers by way of concessionary tariffs, fuel allowance, reduction or abolition of standing charges, the right hon. Member for Chesterfield (Mr. Benn), the then Secretary of State for Energy, said:
The Government have concluded that none of these possibilities offers a satisfactory way of helping poor consumers with their fuel bills.
Opposition Members had what I regard as the effrontery to raise the matter of energy prices. Of course, energy prices are a commercial measure for the nationalised industries. Rates of return in the nationalised industries as a whole are low by private sector standards. The prices are not above levels which can be justified by economic criteria. It is not true, therefore, to regard such prices as a means of indirect taxation.
Domestic gas prices were increased by only 1·7 per cent. overall from last May—the first increase for 15 months. Domestic electricity prices increased last April by around 4·7 per cent., after three years in which the total increase was only 6 per cent. This was followed in July by a reduction of about 3·5 per cent. on the unit rate for those on a typical domestic tariff. Last month, a further reduction of about 1·2 per cent. was introduced.
This means that since the last election domestic gas and electricity prices have fallen in real terms—gas by 7 per cent. and electricity by 10 per cent. In cash terms, since the last election, the price of gas has increased by about 3 per cent. a year. Under the last Labour Government, it increased by about four times as fast. Similarly, the increase in electricity prices has been about 2 per cent. a year. Under Labour, it rose 11 times as fast, or as much in six months as in the last three and a half years.
In the short term, the best way in which to help low-income households with their fuel bills is through the social security system. The Government pay£140 million more in real terms in heating additions to low-income households than our predecessors did in 1978–79—

Mr. Lawrence Cunliffe: rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part the Question:—

The House divided: Ayes 189. Noes 258.

Division No. 16]
[10 pm


AYES


Abse, Leo
Harrison, Rt Hon Walter


Adams, Allen (Paisley N)
Hattersley, Rt Hon Roy


Alton, David
Healey, Rt Hon Denis


Anderson, Donald
Heffer, Eric S.


Ashley, Rt Hon Jack
Hogg, N. (C'nauld &amp; Kilsyth)


Atkinson, N. (Tottenham)
Holland, Stuart (Vauxhall)


Banks, Tony (Newham NW)
Home Robertson, John


Barnett, Guy
Howarth, George (Knowsley, N)


Barron, Kevin
Hoyle, Douglas


Beckett, Mrs Margaret
Hughes, Robert (Aberdeen N)


Beith, A. J.
Hughes, Roy (Newport East)


Bennett, A. (Dent'n &amp; Red'sh)
Hughes, Simon (Southwark)


Bermingham, Gerald
Janner, Hon Greville


Bidwell, Sydney
Jenkins, Rt Hon Roy (Hillh'd)


Blair, Anthony
John, Brynmor


Boothroyd, Miss Betty
Jones, Barry (Alyn &amp; Deeside)


Boyes, Roland
Kaufman, Rt Hon Gerald


Bray, Dr Jeremy
Kennedy, Charles


Brown, Gordon (D'f'mline E)
Kirkwood, Archy


Brown, Hugh D. (Provan)
Lambie, David


Brown, N. (N'c'tle-u-Tyne E)
Lamond, James


Brown, Ron (E'burgh, Leith)
Leighton, Ronald


Bruce, Malcolm
Lewis, Ron (Carlisle)


Buchan, Norman
Lewis, Terence (Worsley)


Caborn, Richard
Litherland, Robert


Callaghan, Jim (Heyw'd &amp; M)
Livsey, Richard


Campbell, Ian
Lofthouse, Geoffrey


Campbell-Savours, Dale
Loyden, Edward


Carlile, Alexander (Montg'y)
McCartney, Hugh


Carter-Jones, Lewis
McDonald, Dr Oonagh


Cartwright, John
McKelvey, William


Clark, Dr David (S Shields)
MacKenzie, Rt Hon Gregor


Clarke, Thomas
Maclennan, Robert


Clay, Robert
McNamara, Kevin


Clwyd, Mrs Ann
McTaggart, Robert


Cocks, Rt Hon M. (Bristol S)
Madden, Max


Cohen, Harry
Marek, Dr John


Conlan, Bernard
Marshall, David (Shettleston)


Cook, Frank (Stockton North)
Martin, Michael


Cook, Robin F. (Livingston)
Maxton, John


Corbett, Robin
Maynard, Miss Joan


Corbyn, Jeremy
Meacher, Michael


Craigen, J. M.
Meadowcroft, Michael


Crowther, Stan
Michie, William


Cunliffe, Lawrence
Mikardo, Ian


Cunningham, Dr John
Millan, Rt Hon Bruce


Dalyell, Tam
Mitchell, Austin (G't Grimsby)


Davies, Rt Hon Denzil (L'lli)
Morris, Rt Hon A. (W'shawe)


Davies, Ronald (Caerphilly)
Morris, Rt Hon J. (Aberavon)


Davis, Terry (B'ham, H'ge H'l)
Nellist, David


Deakins, Eric
Oakes, Rt Hon Gordon


Dewar, Donald
O'Brien, William


Dixon, Donald
O'Neill, Martin


Dobson, Frank
Orme, Rt Hon Stanley


Dormand, Jack
Park, George


Duffy, A. E. P.
Patchett, Terry


Dunwoody, Hon Mrs G.
Pavitt, Laurie


Eadie, Alex
Pendry, Tom


Eastham, Ken
Penhaligon, David


Evans, John (St. Helens N)
Pike, Peter


Fatchett, Derek
Powell, Raymond (Ogmore)


Faulds, Andrew
Prescott, John


Field, Frank (Birkenhead)
Radice, Giles


Fields, T. (L'pool Broad Gn)
Randall, Stuart


Fisher, Mark
Raynsford, Nick


Flannery, Martin
Redmond, Martin


Foot, Rt Hon Michael
Rees, Rt Hon M. (Leeds S)


Forrester, John
Richardson, Ms Jo


Foster, Derek
Roberts, Allan (Bootle)


Foulkes, George
Robertson, George


Fraser, J. (Norwood)
Robinson, G. (Coventry NW)


Freud, Clement
Rogers, Allan


Godman, Dr Norman
Rooker, J. W.


Golding, Mrs Llin
Ross, Ernest (Dundee W)


Gould, Bryan
Ross, Stephen (Isle of Wight)


Gourlay, Harry
Rowlands, Ted


Hamilton, James (M'well N)
Sedgemore, Brian


Hamilton, W. W. (Fife Central)
Sheerman, Barry





Sheldon, Rt Hon R.
Tinn, James


Shore, Rt Hon Peter
Torney, Tom


Short, Ms Clare (Ladywood)
Wainwright, R.


Short, Mrs R.(W'hampt'n NE)
Wallace, James


Silkin, Rt Hon J.
Wardell, Gareth (Gower)


Skinner, Dennis
Wareing, Robert


Smith, C.(Isl'ton S &amp; F'bury)
Weetch, Ken


Smith, Cyril (Rochdale)
White, James


Smith, Rt Hon J. (M'ds E)
Wigley, Dafydd


Spearing, Nigel
Williams, Rt Hon A.


Steel, Rt Hon David
Wilson, Gordon


Stewart, Rt Hon D. (W Isles)
Winnick, David


Stott, Roger
Wrigglesworth, Ian


Strang, Gavin
Young, David (Bolton SE)


Straw, Jack



Thomas, Dafydd (Merioneth)
Tellers for the Ayes:


Thomas, Dr R. (Carmarthen)
Mr. Allen McKay and


Thompson, J. (Wansbeck)
Mr. Sean Hughes.


Thorne, Stan (Preston)



NOES


Adley, Robert
Couchman, James


Aitken, Jonathan
Cranborne, Viscount


Alexander, Richard
Critchley, Julian


Alison, Rt Hon Michael
Crouch, David


Ancram, Michael
Currie, Mrs Edwina


Arnold, Tom
Dickens, Geoffrey


Ashby, David
Dicks, Terry


Atkins, Robert (South Ribble)
Dorrell, Stephen


Atkinson, David (B'm'th E)
Douglas-Hamilton, Lord J.


Baker, Rt Hon K. (Mole Vall'y)
Dover, Den


Baker, Nicholas (Dorset N)
du Cann, Rt Hon Sir Edward


Baldry, Tony
Dunn, Robert


Banks, Robert (Harrogate)
Dykes, Hugh


Batiste, Spencer
Edwards, Rt Hon N. (P'broke)


Beaumont-Dark, Anthony
Eggar, Tim


Bendall, Vivian
Evennett, David


Benyon, William
Farr, Sir John


Best, Keith
Favell, Anthony


Bevan, David Gilroy
Fookes, Miss Janet


Biffen, Rt Hon John
Forman, Nigel


Biggs-Davison, Sir John
Forsyth, Michael (Stirling)


Blaker, Rt Hon Sir Peter
Forth, Eric


Body, Sir Richard
Fowler, Rt Hon Norman


Bonsor, Sir Nicholas
Fox, Sir Marcus


Boscawen, Hon Robert
Franks, Cecil


Bottomley, Peter
Fraser, Peter (Angus East)


Bottomley, Mrs Virginia
Gale, Roger


Bowden, A. (Brighton K'to'n)
Garel-Jones, Tristan


Boyson, Dr Rhodes
Gilmour, Rt Hon Sir Ian


Brandon-Bravo, Martin
Glyn, Dr Alan


Bright, Graham
Goodhart, Sir Philip


Brinton, Tim
Goodlad, Alastair


Brittan, Rt Hon Leon
Gow, Ian


Brown, M. (Brigg &amp; Cl'thpes)
Gower, Sir Raymond


Bruinvels, Peter
Greenway, Harry


Buchanan-Smith, Rt Hon A.
Grylls, Michael


Buck, Sir Antony
Hamilton, Hon A. (Epsom)


Budgen, Nick
Hamilton, Neil (Tatton)


Bulmer, Esmond
Harris, David


Burt, Alistair
Hawksley, Warren


Butler, Rt Hon Sir Adam
Hayhoe, Rt Hon Barney


Butterfill, John
Hayward, Robert


Carlisle, John (Luton N)
Heathcoat-Amory, David


Carlisle, Kenneth (Lincoln)
Heddle, John


Carttiss, Michael
Heseltine, Rt Hon Michael


Cash, William
Hickmet, Richard


Chalker, Mrs Lynda
Hicks, Robert


Chapman, Sydney
Higgins, Rt Hon Terence L.


Chope, Christopher
Hind, Kenneth


Clark, Hon A. (Plym'th S'n)
Hirst, Michael


Clark, Dr Michael (Rochford)
Holland, Sir Philip (Gedling)


Clark, Sir W. (Croydon S)
Hordern, Sir Peter


Clarke, Rt Hon K. (Rushcliffe)
Howarth, Alan (Stratf'd-on-A)


Cockeram, Eric
Howell, Rt Hon D. (G'ldford)


Colvin, Michael
Hunt, David (Wirral W)


Conway, Derek
Jackson, Robert


Coombs, Simon
Jenkin, Rt Hon Patrick


Cope, John
Johnson Smith, Sir Geoffrey


Cormack, Patrick
Knight, Greg (Derby N)






Knox, David
Onslow, Cranley


Lawler, Geoffrey
Oppenheim, Phillip


Lawrence, Ivan
Oppenheim, Rt Hon Mrs S.


Lee, John (Pendle)
Ottaway, Richard


Lewis, Sir Kenneth (Stamf'd)
Page, Richard (Herts SW)


Lightbown, David
Patten, Christopher (Bath)


Lilley, Peter
Patten, J. (Oxf W &amp; Abgdn)


Lloyd, Sir Ian (Havant)
Pawsey, James


Lloyd, Peter (Fareham)
Peacock, Mrs Elizabeth


Lord, Michael
Percival, Rt Hon Sir Ian


Luce, Rt Hon Richard
Porter, Barry


Lyell, Nicholas
Portillo, Michael


McCrindle, Robert
Powell, William (Corby)


McCurley, Mrs Anna
Powley, John


Macfarlane, Neil
Price, Sir David


MacGregor, Rt Hon John
Proctor, K. Harvey


MacKay, Andrew (Berkshire)
Raffan, Keith


MacKay, John (Argyll &amp; Bute)
Raison, Rt Hon Timothy


Maclean, David John
Rathbone, Tim


McLoughlin, Patrick
Renton, Tim


McNair-Wilson, M. (N'bury)
Rhodes James, Robert


McNair-Wilson, P. (New F'st)
Rhys Williams, Sir Brandon


McQuarrie, Albert
Ridsdale, Sir Julian


Major, John
Rippon, Rt Hon Geoffrey


Malins, Humfrey
Roberts, Wyn (Conwy)


Malone, Gerald
Roe, Mrs Marion


Maples, John
Rossi, Sir Hugh


Mather, Carol
Rost, Peter


Maude, Hon Francis
Rowe, Andrew


Mawhinney, Dr Brian
Sackville, Hon Thomas


Maxwell-Hyslop, Robin
Sainsbury, Hon Timothy


Mayhew, Sir Patrick
St. John-Stevas, Rt Hon N.


Meyer, Sir Anthony
Sayeed, Jonathan


Mills, Sir Peter (West Devon)
Shaw, Giles (Pudsey)


Miscampbell, Norman
Shaw, Sir Michael (Scarb')


Mitchell, David (Hants NW)
Shelton, William (Streatham)


Montgomery, Sir Fergus
Shepherd, Colin (Hereford)


Morrison, Hon C. (Devizes)
Shepherd, Richard (Aldridge)


Morrison, Hon P. (Chester)
Shersby, Michael


Moynihan, Hon C.
Silvester, Fred


Mudd, David
Sims, Roger


Neale, Gerrard
Skeet, Sir Trevor


Nelson, Anthony
Smith, Tim (Beaconsfield)


Neubert, Michael
Soames, Hon Nicholas


Nicholls, Patrick
Speller, Tony


Norris, Steven
Spencer, Derek





Spicer, Jim (Dorset W)
Waddington, David


Squire, Robin
Wakeham, Rt Hon John


Stanley, Rt Hon John
Walden, George


Steen, Anthony
Wall, Sir Patrick


Stern, Michael
Waller, Gary


Stevens, Lewis (Nuneaton)
Wardle, C. (Bexhill)


Stewart, Allan (Eastwood)
Warren, Kenneth


Stewart, Andrew (Sherwood)
Watson, John


Stewart, Ian (Hertf'dshire N)
Watts, John


Stradling Thomas, Sir John
Wells, Bowen (Hertford)


Sumberg, David
Wells, Sir John (Maidstone)


Taylor, John (Solihull)
Wheeler, John


Taylor, Teddy (S'end E)
Whitfield, John


Tebbit, Rt Hon Norman
Whitney, Raymond


Temple-Morris, Peter
Wiggin, Jerry


Thompson, Donald (Calder V)
Winterton, Mrs Ann


Thompson, Patrick (N'ich N)
Wolfson, Mark


Thornton, Malcolm
Wood, Timothy


Thurnham, Peter
Woodcock, Michael


Townend, John (Bridlington)
Yeo, Tim


Townsend, Cyril D. (B'heath)
Young, Sir George (Acton)


Tracey, Richard
Younger, Rt Hon George


Trippier, David



Trotter, Neville
Tellers for the Noes:


Twinn, Dr Ian
Mr. Tony Durant and


van Straubenzee, Sir W.
Mr. Mark Lennox-Boyd.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House welcomes the considerable improvement under this Government in support with heating costs for vulnerable groups through the supplementary benefit scale rates, the weekly heating additions and the simpler and better targeted arrangements for help during periods of exceptionally cold weather; supports the comprehensive action taken to improve energy efficiency in the home; and applauds the beneficial effect of low inflation on the costs of fuel, which is of immense benefit to all consumers but most especially those on low incomes.

Orders of the Day — Multi-fibre Arrangement

Mr. Speaker: I must announce to the House that I have selected the amendment standing in the name of the Leader of the Opposition.

Mr. Richard Wainwright: On a point of order, Mr. Speaker. The Minister was good enough to deposit in the Library on 24 November full details of the bilateral agreements referred to in the Government's motion. As I have a keen interest in the matter, I spent some time ploughing through the documents. However, at an early stage I met the obstacle that the vital document, called, "Quantitative Limits Negotiated In Bilateral Agreements Under the GATT MFA" is entirely in French. For the past few days I have been struggling with expressions such as bouclés du genre éponge, les bas à varices, salopettes à bretelles, soutiens-gorge et bustiers—

Mr. Speaker: Order. I do not understand that either, but what is the point?

Mr. Wainwright: I submit that this fact made it almost impossible for me to prepare adequately for this debate. I must add that after the strenuous representations made by the admirable library to the Minister's office, only today, just after noon, an English translation arrived but it was too late for most of us.

Mr. Speaker: I understand the hon. Gentleman's point but I have no authority over such papers as they are matters for the Government. I am sure the hon. Gentleman will be able to raise this matter in the debate.

The Minister for Trade (Mr. Alan Clark): I find myself in a very uncomfortable position. I learned of this alien document only at 7 o'clock this evening. On inquiry I learned that, as the Scrutiny Committee required ratification of this Community document before 8 December to enable us to participate in the textile committee's proceedings and to vote, it was thought courteous to hon. Members who might wish to make inquiries in the Library if at least a document were deposited there.
I can only say that I share the distaste, if not the indignation, of the hon. Member for Colne Valley (Mr. Wainwright). I apologise profusely to him and to the House for this oversight.

Mr. Bowen Wells: Further to that point of order, Mr. Speaker. Is it possible for the Minister to let us know before we start the debate what he is proposing to agree in the bilateral arrangements under the multi-fibre arrangement?

Mr. Speaker: I cannot do that, but I will now call the Minister to tell us.

The Minister for Trade (Mr. Alan Clark): I beg to move,
That this House takes note of European Community Document No. 9809/86 on renewal of the Arrangement regarding international trade in textiles (MFA), and of the Community's bilateral textiles agreements and of the Department of Trade and Industry's unnumbered explanatory memorandum of 24th November 1986 on the provisional application of bilateral agreements on trade in textile products between the European Community and certain third

countries; and welcomes the Government's achievement in the conclusion of a new Protocol extending the Multi-Fibre Arrangement for a further five-year period and the satisfactory negotiation of 26 new bilateral agreements under the arrangement.
The motion before the House deals with the outcome of negotiations to renew the multi-fibre arrangement and the associated bilateral agreements. We debated the subject in May 1985, when the negotiations were still at a formative stage. My right hon. Friend the Secretary of State outlined the Government's approach. In February 1986, just before the Community agreed its negotiating mandate, we debated the matter again. I took careful account of the points made by hon. Members and I have throughout kept in close and detailed touch with industry and other interested parties.
The House can now view the outcome of the negotiations against the United Kingdom's objectives. The process of negotiation involved discussion first within the Community, then within the General Agreement on Tariffs and Trade, and, finally, at a bilateral level with our supplier countries. In my view, the results of the negotiations largely meet United Kingdom needs and should be welcomed.
The House will know that there is a strong weight of pressure in favour of liberalising the trade regime for textiles. This comes from the developing countries whose exports are restricted by the MFA, and from exporters to those countries who believe that their access is limited thereby. There is also pressure from consumers who are affected by the higher prices that can result. In addition, the Third world lobby cogently argues that the developing countries should be allowed special and preferential access to Orgnaisation for Economic Co-operation and Development markets in general and the United Kingdom in particular.
I am sure that hon. Members will also recall the assessments that have been made of the high costs of such a regime on the economy as a whole. There is a school of economists who claim that protection for one sector has costs for others. I fear that in the light of these considerations the new arrangement that has been negotiated, and which I shall describe, may not go as far as those advocates would wish.
I shall begin with the new protocol renewing the multi-fibre arrangement which was concluded on 1 August. A copy is in the Library of the House. I apologise for the fact that the accompanying documents are not in English.
A feature of the new protocol is that it extends the arrangement for five years. This is a longer period than in previous renewals, and I know that the industry welcomes this. The protocol provides for special treatment for the least developed countries and I am sure that this attitude will be widely welcomed on both sides of the House. The United Kingdom had pressed for this. In addition, the protocol also states that all participants should contribute towards liberalisation of trade. This is a clear signal that we expect others to reduce their trade barriers to our exports. There is a provision that there should be no cuts from previous quota levels. Here it should be borne in mind that there were pressures in the United States in particular for such cuts.
A further new element of the protocol, which was included as a response to problems experienced particularly by the United States, is that restrictions may now be introduced on products of certain new fibres, such


as ramie sweaters, where these are directly competitive with traditional MFA products, and are threatening market disruption. In most other respects the protocol essentially renews the arrangement for a further period with little change.
The bilateral agreements—within the terms of the protocol—were negotiated between May and November, and all our MFA low-cost suppliers have now initialled agreements. The detailed quota levels have been placed in the Library. The terms are in accordance with the mandate agreed by Community Ministers last March and also meet the United Kingdom objectives that I last described in the House in February.
The new agreements will provide continued effective protection for the sensitive sectors of the United Kingdom textile and clothing industry, while providing some elements of liberalisation. For the non-dominant suppliers in particular, access levels and growth rates have been increased. For the dominant suppliers, which supply over half of MFA imports, growth rates remain low. On the eight most sensitive products, growth rates for dominant countries are in some cases as low as 0·1 per cent., and almost all are less than 1 per cent.

Mr. Jack Straw: Could the Minister give some idea of overall growth rate so far as it will affect the United Kingdom market?

Mr. Clark: The hon. Gentleman will know that the total that we are discussing within which growth rates are taking place is only 8 per cent. of overall consumption. I do not think that is it comprehensible within that 8 per cent. to give an average overall figure. If the hon. Gentleman pays attention to what I am saying, he will find that the sectoral figures will emerge in the course of the debate. I repeat that all such figures have to be seen in the context of an overall band of only 8 per cent. of consumption.
To see what effect these changes will have on the market as a whole, one has to take into account the fact that almost 60 per cent. of consumption in value terms is supplied by domestic industry. Of total imports, 20 per cent. come from MFA suppliers, and that is only 8 per cent. of consumption. Of these, the majority are supplied by the dominant countries, whose growth rates remain low. The additional increases in access are therefore very marginal in terms of total United Kingdom consumption. Within this framework, the Community was mindful of the degree of openness of the supplier country's own market.
Special treatment was provided in line with the protocol for the least developed countries; the agreement with Bangladesh contains no quota restrictions. Approximately one quarter of the existing quotas, either for the Community as a whole or for certain member states, which had been consistently under-utilised, were not renewed. But in any case, if the need arose, it would be possible to introduce restraints, provided that imports rose above certain specified levels and were threatening market disruption.
A degree of liberalisation has been provided for children's clothes: in the case of the quotas on certain products, suppliers can bring in a specified proportion in the form of children's clothes at a special rate—for

example, Singapore can send five children's garments for every three units of quota up to a limit of 5 per cent. of the total quotas on T-shirts and trousers.
The Community's approach was regarded as positive and constructive by the developing countries, as it provided a movement towards a more liberal regime. At the same time, we have kept tight controls where they are most needed by our industry. The industry had reservations but it gave the Protocol a cautious welcome and I believe that when it has studied the detailed content of the bilaterals it will decide that these too, given the mandate, are satisfactory from its standpoint. We have of course kept in close and detailed touch with the industry throughout. I have had a number of meetings with the unions and I hope that the House will feel able to recognise that we have negotiated effective protection for the most sensitive sectors.

Mr. Bowen Wells: I am grateful to my hon. Friend for giving way. He seems to be suggesting that the industry does not know what he is proposing in the bilateral arrangements, or, at least, has not had a chance to reply to his proposals on the bilateral arrangements. Is that detail known to the industry and if so, is its reaction to what he is proposing positive or negative?

Mr. Clark: There have been consultations with the industry at every stage.

Mr. Wells: Yes, but does the industry know the bilateral arrangements?

Mr. Clark: Yes, of course it does. My hon. Friend may be able to develop his thoughts if he catches your eye, Mr. Deputy Speaker. He will then be able to cite what authority he has for his arguments.
As regards the longer term, the Community has stated that the final aim is the return of textiles to GATT rules. However, I must assure the House that no commitment has been given that all special restrictions on textile and clothing trade will come to an end in 1991. The Community has made it clear that that is a matter that will have to be negotiated in the GATT round.
Of course, in that round all the major derogations and exemptions from the basic rules of the GATT will be on the table for negotiation—in particular, the exemption from GATT disciplines enjoyed by some of the highly advanced developing countries which are among the major MFA suppliers. I should mention that, while those countries maintain barriers which restrict a wide range of the United Kingdom's goods and services, not least among them are barriers which restrict imports of textile and clothing products and it is our aim to bring those to an end.
The result of the MFA negotiations represents a good example of the European Community in negotiating as a bloc. It fully meets the interests of the United Kingdom, taken as a balance of consumers and producers, and I invite the House to endorse the motion in the name of my right hon. Friend the Prime Minister.

Mr. Robin Cook: I beg to move, to leave out from "countries" to the end of the Question and to add instead thereof:
but regrets the failure to negotiate within the Arrangement a new article on social development and working conditions or to secure reciprocal access to the markets of the supplying


countries, and records its concern at the continuing absence of an industrial strategy to reverse the high level of job losses and closures in the British textile industry.
The Minister said that the industry had given a cautious welcome to the protocol and the 26 associated bilateral arrangements. It would be fair to say that the abiding emotion of the industry is one of relief that it has a continuation of the MFA in any form. It is fair to say—I appreciate that this goes back beyond the Minister's time—that at one point at the turn of the year the industry was in some doubt whether the Government were in favour of a continuation of the MFA.
Tonight we see a situation full of paradoxes. The Government, who have been most dogmatic in their statements of rhetorical support for free trade, are represented at the Dispatch Box by a Minister who is one of the most formidable opponents of free trade and who is particularly eloquent when he addresses the House in the vernacular rather than any alien tongue.
The Minister, in the name of a Government who are committed to free trade, is recommending a model of planned trade which regulates the trade between Governments and imports to and exports from their respective countries. I must state straight away that, in principle, that form of collective bargaining is congenial to the Opposition, and we hope that the Government can be persuaded to extend that interventionist approach right across the trade balance that threatens to become severely imbalanced.
It is not possible for us to share the Minister's satisfaction with the state in which the protocol leaves the industry. The textile industry is a clear example of the damage caused to our manufacturing base by the policies pursued by this Administration in their earliest phase. Between 1979 and 1982, output fell by 25 per cent., investment halved and 750,000 jobs were lost—one in three of all the jobs that existed in 1979. That dramatic retreat on the part of the industry demonstrates that an exchange rate policy would be of far greater significance and importance to the industry than anything that can be secured through the MFA or similar trade negotiations.
It is true that since 1982 the industry has shown substantial recovery—entirely through its own efforts—but none of the indicators are back anywhere near the 1979 level. Profits may have rallied, but jobs continue to dribble away. In the first half of this year, 4,000 jobs were lost within the industry. Only last week, Pringle placed half of its work force on short-time working. I understand that this week Lyle and Scott has followed that lead. Those companies are operating at the upper end of the market. I understand that the pressure that is affecting them is the sharp drop in the numbers of American tourists visiting Britain during the summer and their failure to purchase high quality textiles. Pringle and Lyle and Scott are the latest casualties of the raid on Libya that the Prime Minister found it inconceivable to prevent.

Mr. Stephen Dorrell: Cheap.

Mr. Cook: No. The loss of Pringle's sales is attributable to the decrease in the numbers of American tourists coming to Britain. If the hon. Member for Loughborough (Mr. Dorrell) would like to attribute that decline to any factor other than President Reagan's attempt to make the world safer from terrorism, I would be interested to hear from him.

Mr. Dorrell: I would attribute it to Gaddafi's activities.

Mr. Cook: On the contrary, Mr. Gaddafi has not been particularly active in retaliation. I understood that that was why the American tourists were staying away.
There are no grounds for complacency in the light of the recent export-import figures. Imports have risen in eight of the last nine months and exports have gone down in five of those nine months. That presents a sombre and challenging background against which we must judge MFA 4.
I start with a point of agreement. I welcome the fact that MFA 4 removes the poorest countries from the quota restrictions—most notably Bangladesh. I note that Bangladesh is still within the scope of the grimly named "basket extractor systems"—a term for which I in no way blame the Minister. I hope that will not trigger off a repetition, as we witnessed last year, of quotas being invoked against Bangladesh.
It is necessary to recognise that there is something anomalous about Bangladesh receiving special treatment because of its poverty, whereas India and Pakistan, in the same sub-continent with standards of living not much above those in Bangladesh, are capped by quotas. I appreciate that there were severe problems in negotiating the bilateral arrangement with India because, understandably, India sought a large rise in quotas. However, if we are serious about using the MFA to help the poorest at the expense of the more successful nations of the Third world, such an increase must be conceded to the other countries in the Indian sub-continent, preferably at the expense of the dominant countries.
That leads me to the area of the debate where we would cast a slightly jaundiced eye over the protocol that the Minister has recommended to the House. The trade pressure from the MFA countries comes from not the poorest countries, but the dominant countries.

Mr. Dorrell: From Europe.

Mr. Cook: The hon. Gentleman is absolutely correct. Imports from European countries have been increasing at double the rate of imports from MFA countries. I would welcome a robust approach from the hon. Gentleman towards imports from Europe.
The greatest pressure on the textile market in Britain comes from the four dominant countries in the MFA. They account for half the quotas and imports from the MFA in jerseys, shirts and trousers. I accept that the protocol is a fairly faithful replication of the mandate. However, the Minister will be aware that in relation to the dominant countries, the industry feels that the quota increases are too liberal—with a small, not a capital, "1". Any multi-fibre arrangement negotiated with the Liberal party would undoubtedly have oscillating quotas, depending on who was speaking on its behalf.
Last time the House debated the matter the hon. Member for Yeovil (Mr. Ashdown) spoke on behalf of the alliance and prompted a speech from the hon. Member for Rochdale (Mr. Smith), who I presume was speaking in his Back Bench capacity, in which he said that it was a pity his party had not chosen someone to speak for it who knew something about textiles. I understand that today we are to be treated to a speech from the hon. Member for Colne Valley (Mr. Wainwright). Clearly, the dispute in the previous debate will be resolved by ensuring that neither party to it takes part today. We look forward to the hon. Gentleman's speech to find out whether tonight the


Liberal party is in favour of or against the MFA and whether it favours the MFA being extended or choked off at the end of the five years.

Mr. Cyril Smith: So do I.

Mr. Cook: We share the hon. Gentleman's suspense.
We regard the quotas of the dominant countries as too liberal. Tory Members will be aware that the industry stated that any increases in quotas should be confined to growth and consumption in the United Kingdom market—about 1 per cent. per annum. The quotas in the bilateral arrangements provide for increases two, three or four times the growth in the domestic market. I appreciate that that represents a relatively marginal increase in their slice of the domestic market. Nevertheless, arithmetically, the conclusion is inescapable. It means that domestic producers have to accept a steady reduction of their market share within the United Kingdom and the Common Market. [Interruption.] As the hon. Member for Loughborough will be aware, the whole point of the quotas is to cap the competitive edge which these countries have because of their lower costs. That is why we describe them as the low-cost countries contained within the MFA. The industry is certainly making rapid progress towards greater competitiveness and it has increased productivity by 40 per cent. since 1980. Nevertheless, those increases in quotas are likely to be taken up and will represent a diminishing share of the industry's domestic market.
It is not simply a matter of quotas. There is great anxiety in the industry about the loosening of the restrictions on the supplying nations which keep them to the quotas. The extent to which the quotas are malleable is demonstrated by the remarkable surge in imports from the MFA dominants earlier this year. In the first eight months of this year imports to the Community from Taiwan increased by 42 per cent., from South Korea by 38 per cent. and from Hong Kong by 34 per cent. Those increases took place within the regime of the previous MFA.
The new arrangement provides new exceptions to the quotas which contain the capacity for even greater surges of imports. There is particular anxiety about the interstate transfers for which there is provision in the bilaterals and which could result in a 16 per cent. increase in certain quotas over five years. The Minister must accept that the industry will expect him to maintain a close watch on certain developments and a willingness to intervene should it turn out that interstate transfers are being abused and becoming a means of circumventing quota restrictions.
I now come to the other side of the coin. If we accept that it was inevitable, and even desirable, that during negotiations there would be an increase in quotas, it would have been reasonable for us to expect something in return from the supplying countries for those increases in quota. Despite the Minister's brave words, the protocol shows that we have got nothing in return.
The most obvious thing we might have hoped to get in return was that the supplying nations would prise open a slice of their textile market as we opened the door to our domestic textile market. Instead, protectionism among the 26 members of the MFA is stark. There are one or two honourable exceptions, because Hong Kong and

Singapore operate open markets. The extent to which we can supply textile exports to those countries demonstrates what can be done in an open trading situation.
Hong Kong and Singapore export per head of population £9·50 worth of textiles to Britain. Per head of population they import £7 worth of textiles from Britain. That is an imbalance in their favour, but it is a perfectly reasonable one. However, if we look at South Korea, Taiwan and the other members of the dominant four, and include Brazil, we find that those countries export textiles to Britain at the rate of £4·80 per head of their population. In return, they import from Britain textiles to the value of 6p per head. It is impossible to defend that balance as being a result of the differential trade advantages of the two nations. Patently, above all else, that differential represents protectionism. The tariffs with which they surround themselves are astronomical. Brazil has a textile tariff which exceeds 100 per cent. Such a tariff is there not to regulate but to prohibit trade.
The Minister took pride in presenting to the House 26 bilateral agreements which, on the whole, provide for greater access to the British market. I understand that only one of the bilaterals provides for greater access to the market of the supplying country. That is South Korea, which has agreed to reduce its tariffs, but has in the meantime introduced, as a balancing act, deposits on textiles coming into the country.
So far, the points I have made are common to both management and work force. It is fair to say that my next point is pressed more by the unions than by management, but it is also endorsed by the World Development Movement, whose support for the multi-fibre arrangement cannot always be taken for granted. Both the unions and the World Development Movement agree on the need for a social clause in the MFA. Only last Friday the European trade union committee on textiles at its meeting in Luxembourg carried a resolution calling for an article on social development in the MFA which would oblige supplying nations to observe International Labour Organisation standards on working conditions. We find that request entirely reasonable.
If we accept that those countries should have a growing share of our market, we have a reasonable entitlement to ask that they ensure that that growth is passed on to their work force. In the past year, while MFA 4 has been under negotiation, the people of Britain were deeply moved by press reports about child labour in the textile factories in Thailand. It would be entirely wrong if we were knowingly to sanction that type of employment practice by deliberately setting a quota for imports of products from those factories.
Sadly, this area represents another missed opportunity. I am advised by the European trade union committee on textiles that in two weeks of negotiations in Geneva by the 26 bilaterals, exactly 30 minutes was devoted to a perfunctory attempt to get the supplying nations to accept a social clause. I regret that there is no social clause in the protocol. I hope that we will see an extension of MFA 4 into MFA 5, and that when the negotiations start again greater priority will be attached to the social clause than we have seen this time round.
I echo the words of the Minister, that the textile industry is a major industry. It remains important, despite the assault that it had to withstand because of the policies of this Government in their earlier years in office. It is important in terms of jobs, because it has more employees


than the vehicle, aerospace and shipbuilding industries added together. The jobs are located in regions that have been particularly susceptible to the recent recession, and those jobs are especially important in the fight against unemployment.
The textile industry is important to the economy. Its output is greater than the output of the high technology and telecommunications industries added together. It is the third largest sector of manufacturing industry. It is outstripped by only two other sectors. It is a great and significant industry.
MFA 4 offers a breathing space to the industry. I am confident that the industry will use that breathing space to follow through the progress that it has made in the last three years. The industry would be helped in that task if the Government were now to follow up their intervention in overseas trade by intervention at home. It would help the industry to plan an industrial strategy for this sector, with, as its objective, dare I suggest, a return to the target figures—not the employment figures—of 1979. I suspect that that broader task which still awaits us during the next five years will have to await the Government that comes into office after the next general election.

Mr. Gary Waller: After the speech of the hon. Member for Livingston (Mr. Cook) it is difficult to know exactly where he stands on MFA 4. I believe unequivocally that this is an arrangement with which the textile industry can live. It provides a much better deal than at one time seemed possible. My hon. Friend the Minister for Trade deserves our thanks and congratulations for standing up for the interests of the United Kingdom during the complicated negotiations in Geneva.
Our textile industry does not demand permanent protection. The lifting of some quotas as part of the agreement has been accepted without fuss. The objective must, above all, be fair trade. If possible, it should be free trade, but it must be fair trade. We cannot open our markets fully while other countries are still prepared to use all the means that are available to them to protect their home markets. I think, for example, of South Korea. It gave every indication this summer of liberalisation, but when it came to the point it found new ways of preventing our exporters from gaining access to their customers. If high tariffs and quotas need to be relaxed, some countries are quite prepared to utilise restrictive licensing and distribution systems, as well as import deposits and bans, as a recent report of the National Economic Development Office clearly showed.
In the multi-fibre arrangement we recognised that account should be taken, when fixing quotas, of the needs of the very poor countries—Bangladesh has already been mentioned—in building up their domestic industries. It was also right that we should give due credit to those countries—for example, Hong Kong—whose markets are genuinely open to our goods. I am afraid that it is often the fast-developing countries like Taiwan and Brazil, which have significant populations and money to spend on British high quality goods, that discriminate blatantly against us. Tariffs of up to 100 per cent. are not just unfair, they destroy jobs in places like the West Riding and in other areas where such jobs are at a premium.
Over the years the multi-fibre arrangement has not restricted change. Indeed, MFA 3 permitted an annual growth rate in imports of up to 6 per cent.—nearly four

times the growth rate of clothing sales during the period to which it applied. It is not in our interest to hold back international free trade. Indeed, this country depends upon it for its prosperity. However, we must not allow ourselves to be kidded that the situation that we should like to see already exists. Despite the fact that President Reagan held firm against a surge of protectionism in the United States, there remains the possibility of new measures in the future, with all the dangers that these present—that goods could be diverted towards our markets.
The new MFA will last for five years. That in itself will provide stability, which can only be good. We should use that time to try to persuade those with less open markets than our own to engage in play fair. At the end of the day, we must be prepared to be tough with countries like Korea. At the end of the day, too, we cannot give a commitment, as the west Yorkshire end of the Liberal party would like us to do, that MFA 4 represents the end of the road for these arrangements. To do so would invite our competitors to string out their excuses for the delays in becoming more open to our goods, up to the point where they would no longer need to make any excuses. One should not play one's cards when there is no need to do so, and when others are keeping theirs close to their chest.
In the mean time, it is a pity that some people are so wedded to the idea of gloom and doom in the textile industry that they react to almost any news with condemnation. Mr. Alex Smith, chairman of the TUC textile committee, was wrong to react so bleakly to the signing of the agreement. The people to whom I talk in the textile industry tend not be optimists at the best of times, but their realistic assessment was that what was signed in Geneva was acceptable, bearing in mind that many people wanted to see an end to such arrangements.
The textile industry has pulled itself up by its bootstraps, by its own efforts. Let us admit that some of the criticisms that were made a few years ago of our marketing and fashion skills were justified, but now our goods do not just have a good reputation in quality terms, they are much more fashionable and can compete with the best from Italy and other countries.
If one visits textile departments such as those at Huddersfield polytechnic, one comes across enthusiastic people who can transmit that enthusiasm to the young people considering a career in the industry. It is their future about which we should be concerned, and the new MFA will help to ensure that the textile industry is still around and able to offer a career in years to come.

Mr. Richard Wainwright: As to the documents that were provided in the Library for the debate, I accept the apologies that the Minister was good enough to give freely. He is aware, as I am, that it would not have required superhuman labour to put an English translation in the Library in the latter part of last week.
The hon. Member for Livingston (Mr. Cook), who opened for the Labour segment of the Opposition, seemed positively jealous of the amount of talent in the international trade in textiles that the Liberal party is able to deploy. The fact that on previous occasions such colleagues as my hon. Friend the Member for Yeovil (Mr. Ashdown) has led for us does not mean that every time we debate these matters he is sent in to bat number one. As


it is now rather more than 20 years since I was elected for the traditional textile and Socialist seat of Colne Valley, I do not feel particularly modest, although always nervous, in addressing the House.
As the House knows, the concept and system of the MFA was devised first to provide some traditional shelter, and every MFA document down the years has stressed the temporary nature of the system for our important and varied textile industry, so that it could re-equip, regroup and adjust itself to contemporary world conditions. It also aimed, to quote the 1974 MFA, which was typical, to
achieve the expansion of trade, the reduction of barriers to such trade, and the progressive liberalisation of world trade in textile products".
I am glad to acknowledge freely that MFA 4, which the alliance has always recognised was necessary and timely, and on which we have had admirable tuition always from my hon. Friend from across the Pennines, the Member for Rochdale (Mr. Smith), embodies to a substantial, if not a perfect, extent, the concept of liberalisation of world trade in textiles. It is more relaxed in any of its provisions than its predecessors, and we in the alliance welcome this.

Mr. Max Madden: Will the hon. Gentleman confirm that a policy document was launched by the Liberal party on 30 July entitled
Liberals launch strategy for Textile and Clothing Industry"?
I believe that the report was launched by the hon. Member for Yeovil (Mr. Ashdown) and that it urges that the next multi-fibre arrangement renewal be the last and states:
The British textile and clothing industries deserve better".
Would the hon. Gentleman confirm that that remains Liberal party policy or is he enunciating a new policy on behalf of the alliance tonight?

Mr. Wainwright: I shall come to that. I have never been accused in the House of holding back Liberal policy. Indeed, I am proud to proclaim it. It is odd that the hon. Member for Bradford, West (Mr. Madden) should leap in so quickly to try to pinch my peroration from me. I shall come to the admirable document which was promulgated by my hon. Friend the Member for Yeovil in the name of our party. We are especially glad not only that the Government have had the wisdom to commission an admirable, scholarly and impartial analysis of the position of the textile trade from Professor Silberston of Imperial college, but that they have paid great heed to his findings in their attitude to the MFA through the European Community. I shall remind the House of a key passage in Professor Silberston's admirable report:
Taking all considerations into account, the benefits to the economy as a whole of relaxing the MFA would appear to outweigh the costs. Once the necessary adjustments have been made, the economy as a whole should benefit, although considerable problems would certainly arise for the textile and clothing industries.
Because the "Government have failed to provide for the inevitable problems of some parts of the textile, and to a lesser extent the clothing, industries, we cannot join in the smug self-satisfaction of the Government motion. Professor Silberston was frank and correct in claiming that the economy overall would benefit from what we now have as a relaxed MFA but there will be some serious problems for some parts of the textile and clothing industry. The Government should have taken that on board as well.
There are some more welcome parts of the new MFA. We thoroughly approve of the exemption from any quota limit whatever, of such poor countries as Bangladesh, Guatemala, Uruguay, Haiti, Mexico and Colombia. It is certainly a step forward to have such an impressive list of countries which are now to be allowed to send their exports to the Community and other parts of the western world without any hindrance. We hope that one result of that will be to check the notable decline of the developing countries' share of imports of textiles into this country. As hon. Members will know, that has fallen in recent years from 34·5 per cent. of our United Kingdom imports of textile and clothing in 1976 to a mere 27·5 per cent. in 1984. That is not much of a tribute to liberalisation of expansion of international textile trade and not much contribution to getting the appalling weight of debt off the shoulders of the extremely poor and deprived countries.
I would like to welcome the disappearance on new year's day, as a result of MFA 4 and the bilaterals accompanying it, of an iniquitous restriction which the Government placed on the import of shirts from Bangladesh—of all poverty-strickeen and heavily unemployed countries—as recently as July 1985. To have got rid of that is to have got rid of a serious blot on Britain's reputation as a good neighbour in world trade.
In contradistinction to the Labour amendment, I point out with satisfaction that those suppliers with notably open home markets—I refer to such countries as Hong Kong and Singapore—have had their virtue rewarded in the MFA by being permitted higher growth rates than those of closed economies such as South Korea, Taiwan, and so on. These countries suffer under MFA 4 as a result of their narrow, selfish and protectionist policies, so they should suffer as a result. I am surprised that the Labour amendment implies that that is not happening.
With some regret, I now refer to the amendment from the Labour segment of the Opposition. I find it intolerable that countries that are burdened down with debt to Western moneylenders—countries that in the last 12 months, have sent more money back to the West than it has lent them, countries whose blood we and other rich countries are sucking—should be lectured in the Labour amendment about the necessity for them to establish social development and good working conditions. Of course they should. We all want good working conditions throughout the world. It is not the place of moneylenders, who are contributing to the depths of depression of these countries, to tell them how to organise their social frameworks or their working conditions.

Mr. Stuart Holland: rose—

Mr. Wainwright: I shall not give way. I have given way generously, and it took an enormously long time. I hope the hon. Gentleman will catch the eye of the Chair.

Mr. Cyril Smith: Will my hon. Friend give way for a second?

Mr. Wainwright: To my hon. Friend, of course.

Mr. Smith: I ask my hon. Friend to advance a theory about why Labour Members will not press their amendment to a vote tonight. Is it because they do not agree with it, or because of the point my hon. Friend has just made, or because only six of them are attending the debate?

Mr. Wainwright: My hon. Friend is as percipient as always. I am grateful to him for assisting my argument. There is an element of moan and groan in the Labour amendment. Why do not hon. Gentlemen listen to the increasingly robust attitude of some of the more go-ahead textile producers in this country? For example, Viyella proudly proclaims and makes no secret of the fact that it is willing to take on any country in providing value for money in the form of the textiles that it produces so well. Only last week, I was glad to hear the great firm of Dawson International, which is not by any means wholly occupied in the quality end of the trade—it has some very run-of-the-mill cloth producers in its group—say that it, too, was prepared to take on any of the low-cost producers and out-perform them in their line of goods. That kind of robust attitude will stand up to the depressing influence of the Government's economic policies.
The situation would be much more bearable for some of our textile companies if the Government were to expand the economy and bring down their record rates of real interest, which are the enemy of companies that invest in modern textile plants, except for those companies with cash mountains. Of course things would be better if the Government were more robust in their anti-dumping policies. We in the alliance parties have still not given up hope of the Minister. He has a more robust attitude against dumping than his predecessors did. We still want to see the fruits of his labour. I make no secret of the fact in concluding—

Mr. Robin Cook: The hon. Gentleman seemed to be about to conclude. Before he finishes his remarks, I press him on the question that was put to him earlier. It appears that he takes the view that the British textile industry is moving to a position in which it can take on all comers. Before the hon. Gentleman lapses into French so that we cannot follow the latest twists in Liberal party policy, will he make it clear whether the Liberal party would favour an extension of the MFA when MFA 4 expires?

Mr. Wainwright: I am immensely flattered by the zest with which Labour Members pursue Liberal policy. How wise they are to pay such close attention to it. The very next line in my notes contains the warning about which my hon. Friend the Member for Yeovil has often spoken. The industry should be given a fair warning and reasonable time to prepare. The alliance believes that MFA 4 should have been explicitly announced as the last one. After all, it is lasting for five years, a year longer than the previous one. We have no quarrel with that, but we believe that, in the interests of ordinary trade planning, it is necessary that the industry should be given a warning.
I am astonished at the recklessness of the hon. Member for Keighley (Mr. Waller), who seemed to think that there was no need to sound a warning to the industry, that the Government could reserve their position and, if they decided to have no MFA in 1991, that the industry could take it on the chin. We do not believe that. We believe that the industry should be given time to plan. I remind the House that by 1991 the industry will have had 17 years of well-deserved shelter from the full blast of world competition. That is surely enough, and it has proved to be enough, for the robust and enterprising companies to become prepared to play their part fully in the open market.
I must admit that I represent an area in which the wool textile industry has been receiving purely nominal benefit

in recent years from the MFA. It is now so fully occupied that I have received virtually no representations from my constituency about the new MFA either way. I acknowledge that that is something of a privilege. The alliance is well aware that sections of the textile trade will find adjustment much more difficult. We are glad that they now have five full years in which to prepare to take their place as the self-reliant industries that I am sure they wish to be.

Sir John Farr: I do not want to follow too closely the remarks of the hon. Member for Colne Valley (Mr. Wainwright), because his statements cannot stand up to close scrutiny. How can one even contemplate doing away with the MFA or saying beforehand, as the alliance apparently does, that this will be the last one, when world competitors would send to this country goods made by child labour? Until there is competition on equal ground, as the hon. Member for Livingston (Mr. Cook) said, with an arrangement incorporating a social clause specifying the conditions under which these goods are to be made—at least imposing a minimum standard—no British firm, however modern its technology and machinery, will be able to compete. Britain needs to be protected by a strong multi-fibre arrangement for as far ahead as we can imagine.
This is a critical industry. It is very localised. I think that in the east midlands 20 per cent. of the 500,000 or so people in the textile and clothing industry are working. During my recent visits, especially in Leicester, I have been continually asked by management and people on the shop floor to stress whenever I get the chance the need for some form of regulation brought about by the MFA if the industry is to continue. We do not want it obliterated by cheap imports. It has modernised tremendously, at great cost, and often, regrettably, using very superior and expensive Italian and German machines—these days, unfortunately, British machines are rarely used. Even so, a firm in Leicester recently had to shut down five or six of its most modern Italian machines, costing more than £150,000 each, because they could not be operated economically. For the time being, they have been put in mothballs.
The industry is very important to the east midlands. Production and output in textiles and clothing has improved steadily, but is still well below the level of the late 1970s. In 1979, the output indicator was 117·9 but today it is only 104. Although some ground has been made up since the depression in the intervening eight years, there is still no certainty that the present position will be maintained without constant and regular monitoring of our competitors' imports. That is why I particularly welcome this MFA.
However, I would have welcomed a social clause, as that would have been a sensible step. In the period leading up to the termination of this MFA and the next regime—for orderly world marketing there will have to be some form of regime for the foreseeable future—I hope that the Government will prepare to take big steps towards encouraging supplier countries to enter into some sort of social clause relating to the conditions of their employees.
I had thought that my hon. Friend the Minister would mention BRITE, or basic research into industrial technology for Europe. That is of critical importance to our textile and clothing industry. Basically, BRITE is


funded by no less than £392 million of EEC money, covering the same period to the end of, I believe, 1991 as MFA 4 covers. That huge sum of money is available for research into all the modern applications that are so necessary if our industry is to stay abreast of events.
My hon. Friend the Minister, who is so diligent in these matters, will be familiar with BRITE. I hope that he will give an assurance that British companies get their share of that money. There has already been co-operation between a French firm and three Portuguese companies, which are spending a lot of that money on putting robots into the production line for Portuguese textiles. Other firms are combining. There is an application with robotic connections involving two firms in Belgium. They are working hard on trying to modernise their production techniques. A lot of money is also available for specific schemes in relation to introducing modern computer technology and improving existing computer technology in the production of textiles and clothing.
I hope, therefore, that in welcoming MFA 4, my hon. Friend the Minister will comment on BRITE. It is vital to the nation that we should get our share of the European money available.

Mr. Max Madden: First, I declare my interest as a member of the Transport and General Workers Union, which represents many textile workers. This brief debate takes place against a backdrop of massive job losses in the textile and clothing industry during the Government's lifetime. There have been widespread closures and major reorganisation. If that is appreciated, it helps to dispel the allegations that are made by many that the multi-fibre arrangement is unduly protectionist. It puts into perspective the hesitant calls that have been made by some sections of the alliance that the MFA should cease at the end of this agreement.
I join the hon. Member for Harborough (Sir. J. Farr), who expressed regret that there is no social clause within the arrangement. It is my information that the debate on a social clause took all of 30 minutes in the recent discussions. That is regrettable, because there is mounting concern, certainly within the trade unions which represent textile and clothing workers, that there should be a concerted effort to try to improve the wages and conditions of those who work in the textile industry in the developing and least developed countries.
A document was published by the TUC in 1985 entitled "A Fair Balance in textile and clothing trade", a passage of which reads:
in some instances the benefits of industrialisation are not passed on to the workers in textiles and clothing. This judgment is supported by the appallingly low wages earned by workers in many supplier countries…there is increasing evidence that the supplier countries are competing amongst themselves to attract foreign investment by suppressing pay. The widespread appearance of free trade zones in these countries over the last five to ten years, in which companies receive considerable tax concessions from host countries and in which workers are frequently denied employment rights laid down in ILO Conventions on Minimum Labour Standards, is a worrying phenomenon
Indeed it is. We in the Labour party are extremely anxious to ensure that in future we receive in the United Kingdom

an increasing share of textiles that are produced by the least well-off countries. That is a central part of our policy towards the textile industry.

Mr. Stuart Holland: Does my hon. Friend not agree that the official Liberal spokesman on these matters, the hon. Member for Colne Valley (Mr. Wainwright), in claiming that the Labour party wishes to reduce imports from the heavily indebted countries, referred to Singapore and Hong Kong, which are not third world countries with heavy debts? It is precisely by planning a shift in import trade towards the least developed countries that the objectives of which my hon. Friend is talking can be fulfilled, and not by the out-dated Manchester laissez-faire approach.

Mr. Madden: That is right. The more that we debate the difficulties of the industry, the more we come to see that most difficulties cannot be overcome by leaving the industry to the mercies of the free market. We must look increasingly towards the advantages and merits of planning. That is what the debate is all about and that is—

Mr. Wainwright: I am grateful to the hon. Gentleman for giving way. A mere glance at the record in the Official Report, when it is published, will showed that I never cited Singapore or Hong Kong as countries burdened by debt. That was not part of my argument. I was referring to countries such as Bangladesh and Guatemala.

Mr. Stuart Holland: I am glad to get a retraction from the hon. Gentleman.

Mr. Wainwright: I was correcting the hon. Gentleman.

Mr. Deputy Speaker (Sir Paul Dean): Order. The hon. Member for Bradford, West (Mr. Madden) has the floor.

Mr. Madden: Thank you, Mr. Deputy Speaker. I am sorry to intervene in the debate between my hon. Friend the Member for Vauxhall (Mr. Holland) and the hon. Member for Colne Valley (Mr. Wainwright).

Mr. Robin Cook: Will my hon. Friend give way?

Mr. Madden: No. I must work towards a conclusion.
I understand that the Governments of America and Sweden permit official observers from the trade unions representing textile and clothing workers to be present at negotiations. It would be a welcome advance if the British Government, in future negotiations that are of central interest to those who rely on these industries for their livelihoods, were to permit their trade unions to attend the talks as official observers.
What is the Government's policy towards the textile and clothing industry? We are so often treated to dollops of bland complacency served up by Ministers as an excuse for a coherent policy. In the closing minutes that are available, will the Minister tell us the Government's policy towards that important industry? It remains a major employer and exporter and a vital industrial activity within some of the most hard-pressed areas of Britain.
If low pay guarantees jobs and job security, my area and many others where the textile industry has been operating for many years, paying below the average, should have below-average unemployment. The reverse, of course, is the truth. West Yorkshire and Bradford have unemployment that is way above the average. That exposes the myth, peddled by the Chancellor of the Duchy of Lancaster and others, that low pay creates jobs and job


security. We have only to look at the prevalence of low pay within the British textile and clothing industries to dispel that notion completely.
What is the Minister doing to assist the British textile and clothing industry to take full advantage, for instance, of resources that are available from the EEC? What is he doing for those areas of Britain which are looking at ways of securing help from the EEC to expand their textile and clothing activities?
What is the Minister doing to improve training? I recently talked to the management of a firm in Bradford which is proposing to move from Bradford to Doncaster because it claimed that it cannot recruit the skilled machinists in Bradford. That is astonishing.
I have talked within the past few days to another textile employer in Leicester who also complained that he cannot secure skilled workers in his firm. What are the Government doing to ensure that adequate training takes place to enable such firms to find the skilled work force that they require to expand in areas which are suffering from appallingly high rates of unemployment?
What is being done further to improve design? References have rightly been made tonight to the improving design capability of the British textile and clothing industry. But we all know that further advance must be made. What are the Government doing to enable local authorities to open design shops where our products can be shown not only to the British market but to those who seek to sell abroad?
Finally, I again ask the Minister to tell us what co-operation there is between the Department of Trade and Industry, the Department of Employment and other Departments which are charged with regional assistance and development, combating unemployment and trying to help industrialists and manufacturers not only to stay in business but to expand? What co-ordinated policy-making is taking place and what assistance is being given on the ground?
The industry, because of its importance, is anxious to obtain information on the Government's objectives. There is grave concern about the GATT rules and rumours circulating within the industry that the British textile and clothing industry will be sacrificed for concessions for financial services and agriculture.

Mr. Alan Clark: Not true.

Mr. Madden: The industry is demanding clear and precise information about the Government's objectives for the British textile and clothing industry. They are looking for coherent and co-ordinated policies and for positive assistance. It is prepared to help itself, but it wants to be able to do that within a framework where the Government are taking a lead and are giving leadership.
The British textile industry has suffered much in the past and looks forward with some guarded optimism to the future. It is looking to the Minister, his Department and the Government to give it clear information. The closing stages of the debate will give the Minister an opportunity to give us some idea of the future of the British textile and clothing industry.

Mr. Geoff Lawler: I do not know the textile industry managers, directors or workers to whom the hon. Member for Bradford, West (Mr. Madden) has

been speaking. They are certainly not those to whom I have been speaking, who tell me that they want the Government off their backs and are proud of the fact that in recent years they have proved they can manage their own affairs.

Mr. Martin M. Brandon-Bravo: Is it not a fact that the Opposition want the return of training levies, when they are the last thing the textile trade wants? Most companies know how to do in-house and group training.

Mr. Lawler: My hon. Friend is right. The last thing the trade wants is a further financial imposition when companies are participating fully, for example, in the YTS and other schemes to great effect and have developed close links with colleges and schools to ensure that the shortage of skilled labour in the industry is overcome.
The industry cannot be accused of shielding behind the MFA to protect its inefficiencies. What was once an industry synonymous with empty mills, large-scale redundancies and perhaps not perfect designs, slow deliveries and less than speedy initiatives in developing export markets is now an industry that is synonymous with developing the use of new technology, production and training techniques and, above all, successfully breaking into new markets and achieving record export earnings last year.
It cannot be said that the MFA curtails exports, for the reverse has been the case. Under the MFA, imports have grown by 16·5 per cent. in a market that has increased by only 2·5 per cent. Investment in the British industry last year increased by 12 per cent., output was increased and productivity achieved a 40 per cent. increase, whereas the rest of manufacturing industry averaged only 28 per cent. It is wrong to describe it as a sunset industry. It is not only surviving, but leading the way in a manner which other sectors of British industry would do well to follow.
But restricting the industry's growth is a denial to it of access to many foreign markets. The new protocol will be most welcome if it leads to markets being opened up. There are too many countries where the British textile industry cannot get a look-in. I applaud the moves in the protocol to reward countries that open their doors to our industry by allowing them more generous access to our market. However, I hope that that move will not be diluted by rewarding countries that do not deserve such a reward.
We have allowed South Korea a 3·4 per cent. increase in its quota for sweaters. That means that in 1987 that country will be allowed 3·4 per cent. increase on 11,500,000 sweaters, which will be an awful lot more sweaters coming into this country. South Korea will be allowed a 2 per cent. increase in its wool cloth quota. In other words, its industry will be allowed to export 155 tonnes of the material to Britain.
In response, South Korea has made promises to liberalise its market to British textile goods from 1 July. The industry in Britain is still holding its breath, waiting for the issue of those licences. The one concession for our industry announced so far by South Korea means that 24,000 sq m of wool cloth will be allowed into that country in the six months July to December of this year. That compares with a massive 600,000 sq m of wool cloth that will come into Britain from South Korea next year as a result of the recently negotiated bilateral agreement. Our cloth exports to South Korea will be subject to a 60 per


cent. tariff, while cloth entering Britain will be subject to a 13 per cent. tariff. There is nothing in prospect for the British industry from the agreement with South Korea, at least until 1 January 1988. I hope that the Commission, with backing from the Government, will consider threatening—and, if necessary, carrying out those threats—the renegotiation of bilateral agreements if the other countries do not honour the promises that they have made.
The same applies to Brazil. There is an EC quota of 13,000 wool tops. The total production in Brazil is only 14,000 wool tops, yet our access to Brazil is effectively closed. If anything got in, it would be subject to a tariff of 105 per cent. Yet we allowed Brazil a 19·5 per cent. increase in its exports to Britain. There is inequality, and it must be remedied if British industry is to have a fair chance.
Even modest increases in allowing access to our overseas markets could mean a significant difference to the prospects of the British industry. If Korea allowed an average of £1 a head more for domestic consumption of British textile goods, if the same was allowed in Taiwan, and if in Brazil only 50p per head was allowed, it would mean a massive 4,500 jobs in Britain. That is a measure of how much the industry could benefit from the genuine liberalisation of world trade.
Perhaps the greatest danger round the corner is the newly elected Democratic majority in the United States Senate. That majority was elected on a platform of protectionism, which would not only cause great damage to British industry but would set off a new, escalating trend of protectionism throughout the developed world. If that happens—I sincerely hope that it does not—the Commission must be ready to respond and to renegotiate bilateral agreements if our partners in those agreements increase their protectionist measures.
The wool textile industry still employs about 14,000 people in Bradford. It can compete on price, quality, delivery and design. I hope that the new multi-fibre arrangement will be used positively and constructively by the Government, through the Commission, to ensure that the long-term objective, with which none of us would disagree, of liberalising trade is achieved through bilateral agreements. But, if necessary, they must be renegotiated to bring pressure on the parties to honour their promises and to allow British textiles into those markets. The industry will expand, if only it is given the chance.

Mr. James Lamond: I welcome the Minister's success in obtaining this MFA 4. I do so with some reservations, but I recognise his difficulties. The employers in the industry will give the arrangement a fairly warm welcome, but the Minister will wish to examine closely the small print in the arrangement, which in this case relates to the bilateral agreements. They may already have had the opportunity to consider the arrangement, but they will have to study it closely and see how it works in practice before they finally decide to accept it.
I wish to comment on the speech of the hon. Member for Colne Valley (Mr. Wainwright). I almost said my hon. Friend the Member for Colne Valley, because he was a neighbour of mine for many years until the boundary

commissioners, unkindly, separated us by moving us both. He accused the Labour party of telling moneylenders that they should accept a social clause. He said that it was wrong for us to expect moneylenders to do that and that we were wrong to lecture them. But he lectured them, because he spoke about the need to help developing and recently wealthy countries.
It is easy for those who are comfortably off and have comfortable jobs to demand further sacrifices, not from the employers but from the workers. Those workers are low paid and have difficulty in finding alternative employment because this important industry is localised, as my hon. Friend the Member for Livingston (Mr. Cook) said.
In my constituency, the only employer of any importance until recently was connected with the textile industry. Those employed in that industry who lost their jobs found it difficult to find alternative employment.
We cannot rely on the modest improvement in the industry's economic position over the last few years. I attended a press conference at Maple mill, Oldham, in January when Courtaulds announced a substantial investment programme of £4·5 million for some of the mills in the Oldham area. I welcomed that, because it meant that at least there would be a continuation of some employment in the industry. But at the end of that investment programme, fewer jobs will exist. The workers will not receive help from the modest improvement in output. Modernisation which leads to improvement also results in fewer jobs. I support the call by my hon. Friend the Member for Bradford, West (Mr. Madden) for the Government to examine that aspect of the agreement.
If we are to liberalise trading—I do not disagree with that, because it is the proper course—we must consider the consequences for those workers who rely on textiles for their employment. The Government must consider how they can encourage new employment in the areas which are losing out.
If we are to sustain the industry we must consider the two things which advantage those who export to Britain. One advantage has been dealt with already—the protection which some countries give their industry. The other advantage is the lower wages and poor conditions which apply to workers in some other countries. A social clause is necessary. I hope that the Minister will bear that in mind, even though he has been unsuccessful so far.

Mr. Peter Pike: My hon. Friend mentions two matters. Will he accept that a third matter is important? I refer to labelling. This is important to the textile industry because names similar to English names are often used. If the country of origin does not feature on labels, further problems will be caused.

Mr. Lamond: I completely agree. I once had the good fortune to come up in the draw for private Members' Bills and I tried to introduce a Bill about that matter because of its importance. Of course, my Bill was lost.
The Minister should not think that the protocol will wipe the slate clean, and that now that he has an MFA 4, he can go back to sleep over the matter of textiles. The problem will still exist and many more problems may develop as the bilateral agreements become clear. I welcome the Minister's success. He has held his job for somewhat longer than some of his predecessors, but he should not rest on his laurels. We will be back to see him about the matter in the light of developments.

Mr. Alan Clark: With the leave of the House, I should like to reply. I do not know how to interpret the reference by the hon. Member for Oldham, Central and Royton (Mr. Lamond) to the length of time that I have spent in this job. I shall not pursue that point now.
This has been a useful and constructive debate. I listened carefully to the points that were raised and I am sorry that I do not have longer to answer all of them. In common with the hon. Member for Oldham, Central and Royton, I feel that the subject will remain with us and perhaps we shall have the opportunity to discuss it at greater length on another occasion.
The hon. Member for Livingston (Mr. Cook) raised the question of reciprocation, a point taken up by many other hon. Members. The element of reciprocation at present has been essentially passive. We have been liberalising in the direction of those countries that allow better access to our imports, and we have been trying to restrict the level of liberalisation of those countries that have resisted them. Of course, a far more positive and active level of reciprocation is what I hope will be achieved, and that is what we shall insist on in the GATT negotiations where we would seek positive reduction at every level of tarrif barriers against our imports. The House will note that this agreement lasts for five years and that should bring it substantially over the period of the GATT negotiations so that our team in the GATT is not faced with the prospect of the arrangement falling off the edge half way through them. It will have cover throughout and in that context I hope that we shall be able to negotiate a significant level of reciprocation.
The level of support that the Government give to the textile industry is a matter that I should like to dwell upon, but I shall have to omit the details. The support is

extensive and I am satisfied that it covers aspects of design, fashion colleges and universities. I should like to consider the point made by hon. Members from both sides of the House.
I am aware of the concern that has been expressed under the broad heading of the so-called social clause. The clause would mean the sanction of further restrictions on trade if social and working conditions were not improved. That begs many questions: to what standard would they be improved? How would it be enforced and monitored? It can be argued that social and working conditions are more likely to be improved by allowing a country to sell its goods than by preventing it from doing that. However, I must state that I have noted the concern that has been expressed. I do not reject that possibility out of hand. Anxiety has—

It being one and a half hours after the commencement of proceedings on the Motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14 (Exempted Business).

Question, That the amendment be made, put and negatived.

Main question put and agreed to.

Resolved,
That this House takes note of European Community Document No. 9809/86 on renewal of the Arrangement regarding international trade in textiles (MFA), and of the Community's bilateral textile agreements and of the Department of Trade and Industry's unnumbered Explanatory Memorandum of 24th November 1986 on the provisional application of bilateral agreements on trade in textile products between the European Community and certain third countries; and welcomes the Government's achievement in the conclusion of a new Protocol extending the Multi-Fibre Arrangement for a further five-year period and the satisfactory negotiation of 26 new bilateral agreements under the Arrangement.

Orders of the Day — House of Commons Disqualification Act 1975

Motion made, and Question proposed,
That Schedule 1 to the House of Commons Disqualification Act 1975 be amended as follows:

PART I OF SCHEDULE I

1. The following entry shall be omitted—
'Umpire or a Deputy Umpire appointed for the purposes of section 9 of the Reserve Forces(Safeguard of Employment) Act 1985.'.

PART II OF SCHEDULE I

2. The following entries shall be omitted:—
'The Advisory Board for the Research Councils.
The British Film Fund Agency.
The Forestry Commission.
The Gas Consumers' Council.
The Livestock Marketing Commission for Northern Ireland.
A Medical Board or Pneumoconiosis Medical Board constituted for the purposes of Part III of the Social Security Act 1975 or Part III of the Social Security (Northern Ireland) Act 1975, including any panel constituted for the purposes of any such Board.
The Mental Health Review Tribunal for Northern Ireland.
The National Consumer Council.
The National Enterprise Board.
The National Film Finance Corporation.
The National Research Development Corporation.
The Northern Ireland Fishery Harbour Authority.
The Staff Commission established under section 7 of the Greater London Council (General Powers) Act 1979.'.

PART III OF SCHEDULE I

Additional entries

3. There shall be inserted at the appropriate places:—
'Adjudicating medical practitioner or specially qualified adjudicating medical practitioner appointed under or by virtue of Part III of the Social Security Act 1975 or Part III of the Social Security (Northern Ireland) Act 1975.
Chairman of the Advisory Board for the Research Councils.
Chairman of the Agricultural and Food Research Council.
Chairman of the British Library Board.
Chairman of the Economic and Social Research Council.
Chairman of other full-time member of the Forestry Commission.
Chairman of the Gas Consumers' Council.
Chairman or Deputy Chairman of the General Consumer Council for Northern Ireland.
Chairman or Deputy Chairman, in receipt of remuneration, of the Historic Buildings and Monuments Commission for England.
Chairman of the Letchworth Garden City Corporation.
Chairman of the Livestock Marketing Commission for Northern Ireland.
Chairman of the London and Metropolitan Government staff Commission.
Chairman of the Mental Health Commission for Northern Ireland.
Chairman or Deputy Chairman of the National Consumer Council.
Chairman of the National Enterprise Board.
Chairman of the National Research Development Corporation.
Chairman of the Natural Environment Research Council.
Chairman of the Science and Engineering Research Council.
Director of Royal Ordnance p.l.c.
Managing director of the National Research Development Corporation.

Member of a panel of persons appointed under Schedule 5 to the Rent (Northern Ireland) Order 1978 to act as chairmen and other members of rent assessment committees.'.

Entries omitted

4. The following entries shall be omitted:—
'Paid Chairman of an Area Transport Users Consultative Committee established under section 56 of the Transport Act 1962.
Chairman of the Dental Committee of the Northern Ireland Central Services Agency for the Health and Social Services.
Chairman of the Domestic Coal Consumer Council.
Director of Britoil p.l.c. nominated by a Minister of the Crown or government department.
Director of Cable and Wireless Public Limited Company nominated by a Minister of the Crown or government department.
Director of the Cereals Committee Limited appointed by a Minister of the Crown or government department.
Director of any company in receipt of financial assistance under section 5 of the Films Act 1985, being a director appointed by a Minister of the Crown or government department.
Director of the successor company within the meaning of Part V of the Telecommunications Act 1984, being a director nominated or appointed by a Minister of the Crown or by a person acting on behalf of the Crown.
Industrial Assurance Commissioner or Deputy Industrial Assurance Commissioner appointed under the Industrial Assurance (Northern Ireland) Order 1979.
Any member of the British Library Board in receipt of remuneration.
Any member, in receipt of remuneration, of the Historic Buildings and Monuments Commission for England.
Member of the Board of the Royal Ordnance Factories.'.

Other amendments

5. (1) In the entry beginning 'Boundary Commissioner or Assistant Boundary Commissioner', for 'Assistant Boundary Commissioner' there shall be substituted 'Assistant Commissioner'.

(2) In the entry 'Chairman of the Police Authority for Northern Ireland', after 'Chairman' there shall be inserted 'or Vice-Chairman'.

(3) For the entry beginning 'Chairman of any of the Post Users' Councils' there shall be substituted—
'Chairman of the Post Office Users' National Council.'.

(4) in the entry 'Chairman of the Prescription Pricing Agency', for 'Agency' there shall be substituted 'Authority'.

(5) In the entry 'Director of British Telecommunications plc appointed by a Minister of the Crown or government department', after 'plc' there shall be inserted 'nominated or'.

(6) In the entry 'Member appointed by a Minister of the Crown of the Agricultural Wages Board for England and Wales or of an agricultural wages committee established under the Agricultural Wages Act 1948, or chairman of such a committee' the words from 'or of an agricultural wages committee' onwards shall be omitted.—[Mr. Luce.]

Mr. Alan Williams: It is typical that such a controversial measure should be moved at this time of night without any explanation. I should like to ask the Minister a probing question. Why is the uprating in relation to income levels linked on this occasion to earnings rather than to the cost of living? Is that the normal practice, or is it an innovation? If the latter, what is the justification?

The Minister of State, Privy Council Office (Mr. Richard Luce): I appreciate that question. As the right hon. Gentleman knows, when the Act was adopted in 1957 we started with a level of £500. That has been adjusted


from time to time. The broad indicator has been the adjustment in line with the earnings index. Therefore, I thought it right that since the last sum was set at £4,000 in 1983 we should take into account the earnings index in that time scale. I have acted consistently with previous Governments' policies and followed that particular indicator.

Question put and agreed to.

Orders of the Day — European Assembly (Elections)

The Parliamentary Under-Secretary of State for the Home Department (Mr. Douglas Hogg): I beg to move,
That the draft European Assembly Elections Regulations 1986, which were laid before this House on 18th November, be approved.
The regulations are needed to take account of the changes in electoral law made by the Representation of the People Act 1985. They represent a further step in the process of following up all the consequences of the 1985 Act. The House may recall that some provisions in that Act, notably the increase in the deposit and the extension of the franchise to overseas electors, are already in place.
The present regulations introduce several changes, but I shall mention only three substantive changes. The first deals with absent voting. Schedule 1 to the regulations lists provisions in the 1983 and 1985 Acts which are to apply to Assembly elections with any necessary modifications. The new provisions on absent voting at parliamentary elections introduced by the 1985 Act will also apply to Assembly elections.
The second deals with deposits. Schedule 1 also has the effect of increasing the deposit at Assembly elections to £750. The House will remember that in 1979 the deposit at Assembly elections was fixed at £600. Schedule 2 applies provisions in the Representation of the People regulations and the corresponding regulations for Scotland.
The third major change deals with combined elections. Schedule 3 makes detailed provision, similar to that for parliamentary elections, for the conduct of any Assembly election, the poll at which is combined with a parliamentary or local government election.
Subject to the regulations being approved by Parliament, our intention is to make them by the middle of the month. The provision on absent voting would then come into force on 1 January 1987, which is the same time as they come into force for parliamentary elections. These will deal with elections held on or after 16 February 1987. The provisions on the combination of elections will come into force for any election, notice of which is published on or after 16 February 1987, again as for parliamentary elections. The increase in the deposit will apply at any election, notice of which is published on or after the fourteenth day after the regulations are made.
These are fairly complex regulations, and I have explained only the three major changes. I commend them to the House.

Mr. Robin Corbett: The House has previously endorsed the principle of consistency of electoral arrangements for Parliament and the European assembly elections. These regulations, which the Minister with such commendable lucidity and brevity has outlined, achieve that. The Minister explained the modest purpose of the regulations, which are complex, and the Opposition do not intend to divide the House on them.
The regulations honour and reflect what we did in the Representation of the People Act 1985 about absent voters, proxy votes, the deposit and combined elections. On the basis of consistency, I invite the House to endorse the regulations.

Mr. David Alton: We do not under-estimate the importance of these regulations, because they will give effect to the third round of elections to the European assembly. They contain three key points to which I should like to refer hon. Members. The first is rule 17 which says that there will be no change in the electoral system.
The second is on page 38 of the regulations and in describing the ballot paper it says that there will be a chance to, "vote for one candidate only." That excludes an opportunity for a regional list or for any other form of proportional representation. [HON. MEMBERS: "Shame."] Page 49 of the explanatory memorandum which goes with the regulations says quite clearly:
Such elections are conducted in accordance with the simple majority system of elections.
It will come as no surprise to hon. Members to know that the Liberals and the Social Democrats are opposed to the House agreeing to the terms of the regulations and we hope that the Government will agree to withdraw them and give them further consideration. Hope springs eternal, and the reason why we have to keep on pressing the Government on these matters is that it is quite clear that they would like to carry on with the cosy arrangement that has existed for far too long for European and Westminster elections.
We do not like the way in which the regulations were brought before the House last week. In an almost surreptitious way, the Government tried to slip the regulations through to a Standing Committee. The last time we discussed these regulations was in January 1984 when they were, quite properly, debated in the House and not sent off to a quiet corner of the building where in a Standing Committee a small cosy group of people could just push them through without any ado.
Curious as it was, that time hon. Members from all parts of the House rose in unison to block the motion and to stop the regulations from being sent to a Standing Committee. It is significant that leading members of the Government party as well as people from outside the House joined together to ensure that there would be a debate today.
The history of these regulations goes back to the first round of the European elections, at the time of the Lib-Lab pact. The Labour Government of the day put forward two options. The first was for England, Scotland and Wales and the second was for Northern Ireland. The option for Northern Ireland was for a system of proportional representation. Presumably, that was because, when people take to the bullet and the bomb, the way to ensure that minority views are adequately heard is for the Government to introduce a fair electoral system. That seems an extraordinary way to go about things, but in this part of Britain, because we conduct our affairs in a more democratic way and without the violence that, sadly, characterises Northern Ireland, we are excluded from having the option that Parliament deemed appropriate for Northern Ireland.
In 1977, we decided to carry on with the first-past-the-post system in European elections. Labour Members had a free vote, but members of the then Labour Government were urged to support proportional representation. Conservative Members also had a free vote. It is interesting to look back at the figures in the Official Report

for the vote at the end of that debate, because 224 hon. Members voted for the regional list option, one of the two options before the House. That figure included 147 Labour Members and 61 Conservative Members.
Among the Conservative Members who supported us that night in 1977 were the present Secretary of State for Energy, a former Prime Minister, the right hon. Member for Old Bexley and Sidcup (Mr Heath), the present Secretary of State for Education, the Minister of State, Foreign and Commonwealth Office, the present Solicitor-General, the Minister of State, Northern Ireland Office, the Secretary of State for Defence and the Secretary of State for Scotland. We look forward to seeing them all in the Lobby with us tonight supporting us again. We know that they are always consistent in their support in such matters.
At that time, the present Home Secretary said from the Front Bench that the first-past-the-post system had to be used in the first round of elections, but he then said that we should move to proportional representation when we had become used to European elections. During that debate in 1977 he said:
I say this as one who actually favours electoral reform in this Kingdom and who has spoken and voted for it accordingly."—[Official Report, 13 December 1977; Vol. 941, c. 318.]
The delight of our party when we learnt of his appointment can be imagined.

Mr. Deputy Speaker (Sir Paul Dean): Order. I apologise for interrupting the hon. Member, but there are fairly narrow regulations. They are concerned with the rules and practices governing the administration of elections. It is not in order to go into the merits of first-past-the-post or proportional representation. I am sure that the hon. Member will relate his remarks to the regulations.

Mr. Alton: I shall indeed, Mr. Deputy Speaker, but on advice from the Clerks, whom we consulted on the matter, because there are references to the kind of electoral system that will be used——

Mr. Deputy Speaker: Order. I am sure that, on reflection, the hon. Member will not in any way wish to involve the Clerks. I have made, I hope politely and kindly, a suggestion as to what is and what is not in order, and I am sure that the hon. Member will take note of that point.

Mr. Alton: Yes, I shall, and I am grateful for your help, Mr. Deputy Speaker. I shall carefully refer to the regulations and to the explanatory note that accompanies them. Rule 17 on page 19 refers to the method of election. According to the regulations that are before the House tonight, the modifications list no change whatsoever. Our objection on these Benches is that there is to be no change. The way in which the Assembly elections will take place is set out on page 38. The colour of the ballot papers is specified. It says that people will be able to vote for one candidate only. That is another of our objections to the way in which the elections will be conducted.
On page 49 we find the following paragraph:
These Regulations provide for the conduct of the election of representatives to the European Assembly in England, Wales and Scotland. Such elections are conducted in accordance with the simple majority system of elections.
You will understand, Mr. Deputy Speaker, that that is deeply repugnant to those hon. Members who sit on these Benches.
We were pleased, therefore, when the present Home Secretary was appointed. We wrote to him and he replied in these terms:
Thank you for your letter of 3 September and for your kind words about my appointment as Home Secretary. My views on the principle of electoral reform have never been a secret, but they are of course personal, and not shared by the Government as a whole or by a majority in the House of Commons. I obviously therefore cannot give you the undertaking for which you ask.
Delighted as we were by his appointment, it seems that the Home Secretary would be more of a friend to the cause of electoral reform if he returned to the Back Benches.
We want the regulations to be rejected, first, for reasons of elementary justice. During the 1979 European elections, the Liberal party polled 13·1 per cent. of the vote. In 1984, the alliance polled 19·5 per cent. of the vote. That gained us no seats whatsoever in the European Assembly. It cannot be right that when so many people in 1979—

Mr. Deputy Speaker: I am sorry to interrupt the hon. Gentleman again, but he must realise, as must the whole House, that I have to observe the rules of the House. These are very narrow regulations. I have to tell the hon. Gentleman once more that, although I know that he feels strongly about the method of election, he is not in order on the regulations that we are debating now.

Mr. Alton: I refer you, Mr. Deputy Speaker, to column 1153 of Hansard of 26 January 1984 when we had a debate on these regulations. My hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) was able to put forward the kind of arguments that I am putting before the House tonight.

Mr. Deputy Speaker: We are not debating that matter. We are debating fairly narrow regulations, and I must ask the hon. Gentleman to accept the ruling that I have now given to him twice.

Mr. Cyril Smith: On a point of order, Mr. Deputy Speaker. If an instrument is before the House that says that there shall be no change, are we not entitled to pray in support of our case reasons why, in our view, there should be a change?

Mr. Deputy Speaker: Not in this particular case, because it is quite outwith the regulations that we are debating.

Mr. Robin Squire: Further to that point of order, Mr. Deputy Speaker. I think that the Chair will recognise that I rarely raise points of order. I have read the document that we are debating, and I have also seen the words that specifically state the way in which the elections should be conducted. As we know, within the Chamber, hon. Members have a wide variety of views on the matter. I say this without wishing to upset the Chair's judgment, but I should have thought that it would be difficult for a speech to be out of order that included some reference to what is in the regulations.

Mr. Deputy Speaker: A marginal reference is not out of order, but what I had to say to the hon. Member for Liverpool, Mossley Hill (Mr. Alton) was that I understood that he would seek, at an appropriate moment, to speak about different methods of election. This is not within the regulations that we are debating, and it is my job to ensure that the debate is conducted within the rules. I am sure that the hon. Member for Mossley Hill will respond to my request.

Mr. Alton: I will indeed, Sir.

Mr. Cyril Smith: Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Order. The hon. Member for Mossley Hill has already said that he will respond to my request, so he should proceed.

Mr. Cyril Smith: Further to that point of order, Mr. Deputy Speaker. If regulations before the House say that there shall be only one name on the ballot paper, is that not setting out the form that the elections should take, and, if that is what the regulations say, are we not entitled to argue that that is wrong and to argue why it is wrong?

Mr. Deputy Speaker: The hon. Gentleman is certainly entitled to argue that, but not on this occasion.

Mr. Tim Rathbone: Further to the point of order, Mr. Deputy Speaker. Without in any way challenging what you said, Sir, I would like to draw your attention to the first paragraph of the explanatory note on page 49, which I shall read out for the benefit of those hon. Members who do not happen to have the regulations in front of them, or have not yet turned to page 49:
These Regulations provide for the conduct of the election of representatives to the European Assembly in England and Wales and Scotland. Such elections are conducted in accordance with a simple majority system of elections.
Surely, if that is in the explanatory note, it has been put there to explain matters to those hon. Members who are taking part in the debate. Therefore, is it not within the rights of every hon. Member to argue against that, as the hon. Member for Liverpool, Mossley Hill (Mr. Alton) has just been doing, as he does not believe in the system of simple majority elections? That must be within the terms of the draft European Assembly Elections Regulations 1986, which we are discussing. Is it not reasonable for hon. Members on both sides of the House to apply their minds and their arguments to the system of elections which may not be in accord with the simple majority system because they do not believe that that is the correct way to do it?

Mr. Deputy Speaker: I have already said that a passing reference would be in order, but these regulations deal with the rules and practices governing the administration of the elections. They do not deal with the method of election. A passing reference to the method of election would be in order, but it would not be in order to have a long debate on the merits of the first-past-the-post system or proportional representation. The hon. Member for Mossley Hill has already accepted my ruling on that matter, and I am sure that he does not intend to pursue it any further.

Mr. Alton: I intend to pursue the points that I have raised that are in the regulations, as you have directed, Mr. Deputy Speaker.
On page 38, there is a proforma ballot paper which will be used if the regulations are passed. By the same token, if the House decides to reject these regulations, we would have to go away and devise some other way of doing things. My point about the ballot paper as it appears in the regulations is that it lead to the disfranchisement of large numbers of people. A total of 2·5 million people were disfranchised at the previous European election and 1·6 million people were disfranchised at the election before that. If the ballot paper in the regulations is accepted, it will be a monstrous piece of villainy and a blatant injustice


and millions of our citizens will be cheated of their democratic rights. Surely that would be totally unacceptable.

Mr. William Cash: Would the hon. Gentleman accept that the mere fact that they have not managed to accumulate the necessary number of votes to win an election does not mean that people are disfranchised, but simply that they have lost an election?

Mr. Alton: It is obvious that the hon. Gentleman does not care a great deal about justice. If he subscribes to the adage of Edmund Burke that there should be no taxation without representation, I am sure that he will agree that the millions of alliance voters who are completely without representation in the European Assembly should be entitled to have large amounts of tax given back to them.
The next point about the regulations concerns the treaty of Rome. Article 138 of the treaty says quite clearly;
The Assembly shall draw up proposals for elections by direct universal suffrage in accordance with a uniform procedure in all member states. The Council shall, acting unanimously, lay down the approriate provisions which it shall recommend to members states.
The treaty of Rome makes it clear how we should proceed in organising our European elections. The ballot paper before us in the regulations and the qualification on page 19 of the explanatory memorandum that there will be no change made in the modifications to the elections, make it clear that we will not comply with the treaty of Rome. The Assembly will never be able to act unanimously because the British Government refuse to accept any fair voting system. The ballot paper we are going to approve tonight will distort the entire make-up of our delegation in the European Asembly.

Mr. John Butterfill: Can the hon. Gentleman tell me whether the Council has come forward with any such proposal that the British Government have refused to accept or, if it not true, that no such unanimous proposal has emerged to date?

Mr. Deputy Speaker: I hope that the hon. Member for Mossley Hill will resist the temptation to widen the debate. I have already said more than once that we must stick to the regulations, which are fairly narrow.

Mr. Alton: I do not wish to be drawn down a road which you will rule against, Mr. Deputy Speaker. The Political Affairs Committee has recently recommended the regional list system for the next round. In the March 1982 vote, about eight Conservative Members of the European Parliament voted for the regional list system. Therefore, the system has great support in Europe and in many quarters of the House.
My next point is that the ballot paper in the regulations does not provide for more than one candidate. That will mean that we will be back to the massive Euro-seats we have used in the past two elections, which are on the simple first-past-the-post system. In a debate in 1977, the right hon. Member for Morley and Leeds, South (Mr. Rees) recommended the regional list system:
We are talking not about 635 constituencies, but about 81 constituencies. There is no doubt that with 81 constituencies for Europe, if we go through the normal method of election, the slightest swing will result in the parties in this country being under represented in the councils of Europe. We are talking about an Assembly that does not spawn a Government, a body which is advisory and

supervisory. The list system is appropriate for Europe. A different type of representative will be created, perhaps with a regional interest that is not in competition with the House of Commons."—[Official Report, 13 December 1977; Vol. 941, c. 416.]
We have failed in the regulations to incorporate the thinking of the then Home Secretary into the way we go about our affairs. I regret that. Our failure to provide a fair electoral system will make us the laughing stock of Europe. It demonstrates that there is no spirit of fairness or justice in this place and that we are not committed, to the concept of a far-reaching European Community where there is harmonisation of many of the things that we should ensure are harmonised. A common voting system for the European Assembly would be one step in that direction.
A common voting system would at least mean that people throughout the European Community vote in the same way. It would be a signal from the House that we intend to ensure that people's votes, regardless of where they live or where they come from, will count equally. In the regulations, we carry on the nonsense that we have one system for Northern Ireland, yet a different system for England, Scotland and Wales. That cannot be right. Therefore, I invite the House to reject these regulations.

Mr. Robin Squire: I did not intend to speak in this debate, but, in a sense, I have been spurred on by one or two of the observations made by some of my hon. Friends. It is important in a short speech—I assure you, Mr. Deputy Speaker, in view of your earlier strictures, that it will be a short speech—to put on record the fact that many Conservatives in the country and a number of Conservatives in the House equally regret that the system is as it is set out in the regulations.

Mr. Keith Best: As one who stood with me to ensure that these regulations should be debated tonight, rather than be referred to the Joint Committee on Statutory Instruments, will my hon. Friend agree that, had it not been for the presence of Conservative Back Benchers who believe in electoral reform these matters would not now be debated?

Hon. Members: That is right.

Mr. Squire: At least some hon. Members have already given the answer to my hon. Friend. I need add no more. My hon. Friend is right.
I regret that it has been made clear that we are the only western European country that still defends an out-dated and out-moded system. I do not wish to refer to the arguments, Mr. Deputy Speaker. I am aware of your earlier comments. It is clear that, on the central question that one should address to any electoral system, it fails. Quite simply, it produces a result that does not reflect the votes cast. I urge all hon. Members to ponder that point. It applies on many other levels that are not covered by the regulations, but it holds true in this respect. The sooner we recognise that we are losing some friends in European Governments who are otherwise supportive of us, because of our obstinacy, the sooner we may grudgingly and belatedly be dragged into a realistic, modern system.

Mr. Deputy Speaker: Order. The hon. Member has suggested that he is out of order. Of course he is. I hope that he will either resume his seat or address his remarks to the narrow regulations.

Mr. Squire: I am happy to say that much of the regulations are such that I would not question them. I have made clear the point of my objection. It applies to matters already covered by one or two other hon. Members. It is important to put on record that there is also objection on the Government side.

Mr. Keith Best: I ask the House to look briefly at schedule 3, which refers to the modification of Assembly elections rules. Paragraph (2)(e) of the regulations was referred to by the hon. Member for Liverpool, Mossley Hill (Mr. Alton). It states that the ballot paper
shall be of a different colour from that of any ballot papers used at an election the poll for which is taken together with the poll for the Assembly election.
This encompasses a situation in which European Parliament elections take place at the same time as domestic elections. My concern is that the regulations specify that the ballot paper for the European Parliament elections will be a different colour from the ballot paper for the domestic election.
Any elector may infer that, because the colour is different, the system of election might be different. Some people may consider that the different colour demonstrates whether the elections are fair or unfair. Many Conservative Members consider that electoral reform is necessary. We can no longer be the odd man out in Europe. Conservative Members believe that electoral reform will be inevitable. We favour that approach because we believe that it will safeguard this country from the tyranny of domination by one part or the other.

Mr. Tim Rathbone: Some minor points have not been touched on so far. One is the fact that the Labour Benches are completely denuded, except for the presence of the distinguished hon. Member for Birmingham, Erdington (Mr. Corbett), who is resting his feet on the Table. The lack of attendance is a condemnation of the Labour party's lack of interest in Europe generally—

Mr. Alex Carlile: In democracy.

Mr. Rathbone: —and in democracy specifically.
There has been much discussion about the pros and cons of electoral systems for this House and for local government and assemblies, but those pros and cons tend to centre on the creation, or lack of creation, of strong government. That question does not arise in respect of elections to the general Assembly. We are not talking about a choice of Government; we are talking quintessentially about the representation of all parts of national interest and nation political belief in an assembly in Europe. It is a tragedy that the measure has not been drawn up in a way that would allow us to debate in full, according to your ruling, Mr. Deputy Speaker, the pros and cons of the various systems of election. I would not think of challenging your ruling on that, Sir, but it is sad that we cannot go into all the details of the advantages not only of proportional representation generally as opposed to first-past-the-post but different systems of proportional representation as opposed to first-past-the-post.

Mr. James Wallace: The proposed system, which will involve marking X on the ballot paper, means that the representation from the

United Kingdom will not necessarily be truly representative. Does the hon. Gentleman accept that that has implications for our European partners? The unbalanced nature of our delegation to the European Assembly affects the committee structure within that Assembly? Therefore, the electoral system will have consequences not only in this country but in the Assembly.

Mr. Rathbone: rose—

Mr. Deputy Speaker: Order. The hon. Member for Lewes (Mr. Rathbone) said that he he was sad that he was not able to develop the argument. Indeed, the whole House may be sad, but the fact is that it is my job to ensure that the debate is directed to the regulations. If the hon. Member were to follow that line, he would be out of order, as I am sure he knows.

Mr. Rathbone: I would not think of doing so, Mr. Deputy Speaker, but I have to give credence to my honourable opponent, the hon. Member for Orkney and Shetland (Mr. Wallace). It seemed that there was a germ of truth in what he said, even though it may have been out of order.
It is more than sad that we are considering a measure that will set the direction for important elections in the knowledge that, whatever the intricacies and details of the regulations, they will guarantee—it is not by chance—that the outcome of the elections will not he representative of this country. As a good Conservative, I believe that those elections would be much more sensibly conservative if we had another form of election rather than the one laid down in the regulations. I hope that the House will ensure, for the future, that we have the opportunity to debate the system as well as the details of elections.

Mr. Douglas Hogg: There is a handful of Liberal Members here tonight, which is an extremely large number for them. That makes me suppose that they intend to vote against these regulations. We need to understand what they will achieve by voting against them. The hon. Member for Liverpool, Mossley Hill (Mr. Alton) accused the Government of disfranchising electors, and said that the electors had been cheated of democratic rights. What rubbish! It is the Liberals who propose to disfranchise electors and to cheat them of their democratic rights by voting against the regulations. I shall explain why.
One of the most important results of the regulations is that we shall extend to overseas citizens the absent voting procedure in respect of the European Assembly. Liberal Members are taking advantage—

Mr. Alex Carlile: Will the Minister give way?

Mr. Hogg: I shall not give way. The Liberal party may not like it, but unfortunately it will have to listen to it. The Liberals are seeking tonight to deny to British citizens overseas the ability to vote in European Assembly elections. That would be the result of their actions. I hope that the electorate understands that it is the Liberals, not us, who are cheating them of their democratic rights.

Mr. Cyril Smith: On a point of order, Mr. Deputy Speaker. Am I right to assume that if the regulations are defeated it is perfectly possible for the Government to introduce new regulations; or are we to assume from what the Minister said that, if they are defeated, that is the end,


and no other regulations can be introduced? Alternatively, is the Minister just being his usual silly, ridiculous, childish self?

Mr. Deputy Speaker: The hon. Gentleman knows very well that that is not a matter for me. I am under the impression that the House now wishes to come to a decision—[HON. MEMBERS: "No."]—but that is not a matter for me.

Mr. Alex Carlile: rose—

Mr. Deputy Speaker: Does the hon. and learned Gentleman wish to raise a point of order?

Mr. Carlile: No, Mr. Deputy Speaker. I wish to intervene in the debate.
I was quite content to hear the debate out and to let it conclude until I heard the Minister's speech. He displayed an outrageous lack of logic in suggesting that by opposing these regulations—because his fourth-form debating tactics will not put us off—we would bring them to an end, along with a review of European electoral regulations. That is absurd. If these regulations are voted down, the Government will have to produce much better regulations. Schedule 3(6) states:
After paragraph (1) of rule 29 (equipment of polling stations) there shall be inserted the following paragraph:—
'(1A) The same ballot box shall be used for the poll at the Assembly election and the poll at the parliamentary election or, as the case may be, local government election.'
Until I heard the Minister, I had assumed that the Government adopted a fairly serious approach to the regulations. I also assumed that that paragraph was inserted to provide convenient arrangements at polling stations. But, having heard the Minister, I am extremely suspicious about the motive for this change in rule 29. Why are the Government insisting that the same ballot box shall be used for Assembly elections, parliamentary elections and local government elections? Is it an economy measure, for which one could almost forgive them? Is it so that police cars are not too full with a multiplicity of ballot boxes, again for which one could almost forgive them? The answer is that the Government believe that they can hide the unfairness of the electoral system that these regulations continue within the darkness of a single ballot box.
It is my view—and I am sure my right hon. and hon. Friends agree—that when the electors go to the polling station, and the European elections and the parliamentary elections are taking place on the same day, they should have the advantage of separate ballot boxes for the different elections. Perhaps when there is only one election the Government can get away for the time being with perpetuating a bankrupt electoral system, partly because of the Labour party's apathy, but they should not be allowed to get away with disobeying the spirit of the treaty of Rome, ignoring the views of parliamentarians throughout Europe, casting aside the opinions of the British people and overturning democracy in this shameful way.

Question put:—

The House divided: Ayes 74, Noes 12.

Division No. 17]
[12.26 am


AYES


Alexander, Richard
Nicholls, Patrick


Ashby, David
Ottaway, Richard


Baker, Nicholas (Dorset N)
Page, Richard (Herts SW)


Baldry, Tony
Peacock, Mrs Elizabeth


Bevan, David Gilroy
Portillo, Michael


Boscawen, Hon Robert
Powell, William (Corby)


Bottomley, Peter
Powley, John


Bright, Graham
Raffan, Keith


Brown, M. (Brigg &amp; Cl'thpes)
Rhodes James, Robert


Bruinvels, Peter
Roe, Mrs Marion


Burt, Alistair
Rowe, Andrew


Butterfill, John
Sackville, Hon Thomas


Carttiss, Michael
Sainsbury, Hon Timothy


Cash, William
Sayeed, Jonathan


Conway, Derek
Shepherd, Colin (Hereford)


Cope, John
Silvester, Fred


Currie, Mrs Edwina
Sims, Roger


Dorrell, Stephen
Smith, Tim (Beaconsfield)


Durant, Tony
Spencer, Derek


Forsyth, Michael (Stirling)
Stern, Michael


Garel-Jones, Tristan
Stevens, Lewis (Nuneaton)


Goodhart, Sir Philip
Stewart, Allan (Eastwood)


Hamilton, Hon A. (Epsom)
Thompson, Donald (Calder V)


Hicks, Robert
Thompson, Patrick (N'ich N)


Hogg, Hon Douglas (Gr'th'm)
Thurnham, Peter


Hunt, David (Wirral W)
Townsend, Cyril D. (B'heath)


Knight, Greg (Derby N)
Trippier, David


Lilley, Peter
Twinn, Dr Ian


Lloyd, Peter (Fareham)
Wakeham, Rt Hon John


Lord, Michael
Waller, Gary


Lyell, Nicholas
Watts, John


MacGregor, Rt Hon John
Wheeler, John


Maclean, David John
Wolfson, Mark


McLoughlin, Patrick
Wood, Timothy


Malone, Gerald
Yeo, Tim


Maude, Hon Francis



Mitchell, David (Hants NW)
Tellers for the Ayes:


Moynihan, Hon C.
Mr. Mark Lennox-Boyd and


Neubert, Michael
Mr. David Lightbown.


NOES


Ashdown, Paddy
Meadowcroft, Michael


Beith, A. J.
Smith, Cyril (Rochdale)


Bruce, Malcolm
Steel, Rt Hon David


Carlile, Alexander (Montg'y)
Wrigglesworth, Ian


Cartwright, John



Hughes, Simon (Southwark)
Tellers for the Noes:


Kirkwood, Archy
Mr. David Alton and


Livsey, Richard
Mr. James Wallace.

Question accordingly agreed to.

Resolved,
That the draft European Assembly Elections Regulations 1986, which were laid before this House on 18th November, be approved.

Orders of the Day — SCOTTISH GRAND COMMITTEE

Motion made and Question put forthwith, pursuant to Standing Order No. 94(3).

That, in the course of its consideration of the matter of Agriculture and Fishing in Scotland, the Scottish Grand Committee may meet in Edinburgh on Monday 8th December at half-past Ten o'clock.—[Mr. Cope.]

Hon. Members: Object.

Mr. Deputy Speaker (Sir Paul Dean): Objection taken.

Orders of the Day — North Middlesex Hospital (Cancer Treatment)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Portillo.]

Dr. Ian Twinn: I am grateful for the opportunity to raise tonight the subject of the proposed closure of the radiotherapy cancer treatment unit at the North Middlesex hospital in my constituency. No other issue since I have been in this House has caused more public concern among a wide range of my constituents than the proposal of the North East Thames regional health authority to close this unit. All the political parties in Edmonton are united—as are the residents' groups and all the other representative groups in my constituency, including the local authority—in opposing this proposal of the health authority.
Nor is it just a parochial matter concerning Edmonton. This matter has concerned the hon. Member for Tottenham (Mr. Atkinson) and, in the borough of Haringey, my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi). I am pleased to see on the Treasury Bench my hon. Friend the Member for Enfield, Southgate (Mr. Portillo), who, together with my hon. Friend the Member for Enfield, North (Mr. Eggar), have been particularly strong in ensuring that the wishes of their constituents are known to the Government and the regional health authority. I am grateful to them for the support they have given me in this matter.
This issue goes beyond the London boroughs of Haringey and Enfield. It affects also our neighbours in Essex and Hertfordshire—my hon. Friends the Members for Harlow (Mr. Hayes), for Epping Forest (Sir J. Biggs-Davison), and for Hertford and Stortford (Mr. Wells) and my right hon. Friend the Member for Castle Point (Sir B. Braine)—all of whom have been active in objecting to the ill-founded proposal of the regional health authority.
The Minister will be aware that this proposal affects the whole of the North East Thames region. It is proposed to decrease the number of radiotherapy cancer treatment units from nine to five. This has already provoked one Adjournment debate, when my hon. Friend the Member for Southend, East (Mr. Taylor) raised the whole question as it affects the county of Essex. I will not tonight go over the ground that he covered. Our problems are similar, though my constituency is affected more as a built-up area.
It is strange for the House to debate the Health Service and not to mention cuts, but no cuts are involved in this matter. Indeed, the region's plans would result in the expenditure of several million pounds extra in the short term, and probably increased expenditure in the long term. I would argue, however, that the region's proposals will lead to a cut in the standard of service to my constituents and to people in neighbouring constituencies. The firm medical opinion of consultants such as Dr. Maurice Sutton and his colleagues at the North Middlesex hospital, and other medical opinion, is that there is no proof that the extra spending which the region has earmarked will result in the better treatment of patients. If we are to spend extra money in the Health Service, it should be concentrated to the benefit of patients, not to the benefit of others in the Health Service.
Some specialists involved in the proposal suggested that the demand for radiotherapy will decline. The region has not put the case strongly, but we must argue against it. Drug treatment for cancer is popular in sonic areas, but there is no proof that it is especially efficient. Indeed, the toxicity of the drug means that more deaths may arise from its use. In the latest British Medical Journal, an interesting article suggests that the results of the drug treatment of cancer are disappointing.
Cancer will affect one in three people and will probably result in the death of one in four people. We have an ageing population, and it would seem that radiotherapy will be in increasing demand, not decreasing demand as some have suggested. Therefore, it is important to keep open centres that can provide a service to the population.
Why then has the North-East Thames regional authority suggested the massive disruption of cancer treatment provision in our area? It is difficult to say why it has done so, but part of the reason goes back to the DHSS itself. The Department's Standing Medical Advisory Committee suggested that every region should examine cancer treatment provision and suggested that larger units should be introduced. One can understand why the region undertook the review. However, the treatment already provided in the region is among the best in the country. If one was to produce a league table of survival rates of cancer patients, our region falls between third and fourth places. The Department cannot say that the provision in the region is poor or inferior, so we must find other reasons. We know that the change is not proposed on the ground of cost since the region's plans will be significantly more expensive.
Some people in the DHSS argue that larger catchment areas would be more efficient, and the figure of 1 million people has been bandied about. Yet there is no scientific evidence to support the view. It is an interesting and debatable opinion, but it is only an opinion. I suggest that it is the opinion of those who already work in large units and that it is based upon their experience, not upon hard evidence.
North Middlesex hospital has one of the best buildings for radiotherapy in the country. It is modern and purpose-built and no adaptation costs are incurred for the machinery. It is a pleasant building for patients. It is light and airy and not down in the dungeons where one normally finds radiotherapy treatment in hospitals. Some radiotherapists elsewhere are envious of the facilities. It is a shame that the facilities at the hospital should be declared redundant and that new facilities will have to be duplicated elsewhere—perhaps at the Royal Free hospital or at St. Bartholomew's hospital.
The region's proposal has already cost money. About £41,000 has been wasted by the region because a linear accelerator was on order for the North Middlesex hospital but it was cancelled at the 11th hour, 59th minute, by the region. I presume that the region had to pay the cancellation fee and many thousands of pounds for the adaptation and removal of one machine to make room for a new machine.
My main objection to the proposal is that it ignores the patients. The Coopers and Lybrand report, commissioned by the North-East Thames region, might be a fine piece of intellectual property. I have read the volumes and they make sense. I can understand the rational argument. Bigger centres can be appealing, particularly for a medical administrator, because all the people are in one place. It


is appealing for specialists in the teaching hospitals. Larger centres, more machinery, more ancillary staff and more patients add to the status of a department. It might be useful to specialist researchers who might find it convenient to be associated with a radiotherapy treatment centre. All such arguments must be weighed in the balance.
Unfortunately the proposals do nothing for the patients. They might do a lot for medical specialists, but they do nothing for the patients. The position of patients will become worse if the proposals are implemented. Patients who need radiotherapy are usually seriously ill. They might have only months to live. That will be true for many lung cancer patients. Any journey will be painful and trying, and will make many patients anxious. The North Middlesex hospital is easy to reach. It is directly off the North Circular road, it is within a 10 minutes' drive of the M25 and it is on the A10 main arterial road.
My constituents from Enfield and Haringey and others from Essex and Hertfordshire can get to the hospital by private transport or by ambulance relatively easily. If they have to go to the Royal Free hospital or to St. Bartholomew's, travel will be difficult. They can be collected by ambulance only in the morning—12 patients per ambulance—and be returned after dark. It would be difficult to justify the cost of doing more than that. There are no parking facilities near the Royal Free hospital or St. Bartholomew's hospital. Journey times will be at least double. I find that worrying.
Members of the regional health authority are not united on the proposal. The working group reported in March 1986 to a closed meeting. I have seen its private report, and paragraph 101 recommends that the centre should be established at the North Middlesex hospital for three reasons: it is close to the centre of population; it will reduce travelling time; and there is space for expansion.
In a mysterious way, those recommendations have disappeared from the published report. The region has not justified that and it has not seen fit to answer the criticisms. I found the region's attempt to justify the decision afterwards very mysterious. The region's statement entitled:
A review of cancer treatment services in the North East Thames Region.
claims:
One of the major considerations in the Review is the importance of avoiding excessive travelling time of patients undergoing treatment for cancer…accessibility to services will generally be improved across the Region.
However, the only way in which the region can justify that perversion of the truth is to provide hostel accommodation for patients. Instead of living at home in the last few months of their lives, my constituents will be forced to live for five nights a week in central London away from home, or they will have to endure nasty ambulance journeys in central London. The region's argument is a perversion of the true position.
The region has been over-influenced by fashion. It has been tempted by the idea that big is better, whereas there is no proof that that is the case with cancer treatment. Although I cannot prove it, I suspect that the region has been influenced strongly by the lobby from the teaching hospitals which would like to concentrate all the new resources in those hospitals, away from the district general hospitals. The problem is that the population exists close

to the district general hospitals while the teaching hospitals are concentrated in the de-populated areas of central London.
If the decision is allowed to be implemented, there is a danger that the consumers in the Health Service will be ignored, that many millions of pounds will be wasted in satisfying the desires of those producing the service and that no benefit will accrue to the patients. When my hon. Friend the Minister considers these decisions, if they eventually arrive on her desk, I hope that she will take all these factors into account.

The Parliamentary Under-Secretary of State for Health and Social Security (Mrs. Edwina Currie): I congratulate my hon. Friend the Member for Edmonton (Dr. Twinn) on his success in the ballot for today's debate. I have had cause to be impressed twice by his efforts on behalf of his constituents in the past two days. He came to see me yesterday to discuss the Cry-Sis organisation that helps families with crying babies. Then, as now, he put the case for his constituents with dignity and in detail in a way that would have greatly impressed them.
My hon. Friend referred to an Adjournment debate of my hon. Friend the Member for Southend, East (Mr. Taylor) on 31 October. He was right to state that representations have been made on the issue by numerous hon. Members, specifically my hon. Friends, the Members for Enfield, Southgate (Mr. Portillo) and for Enfield, North (Mr. Eggar). I must enter the same caveat as I entered previously.
I am obviously a little restricted in the scope of my reply to my hon. Friend the Member for Edmonton, because if, following consultation by the district health authority on the proposal to close the unit, any of the local community health councils concerned object to the proposed closure and the district and regional health authorities confirm it, the proposal will indeed be referred to Ministers for a final solution. Because of that, it is absolutely essential that I do not anticipate the outcome of such consultation by stating a view. My hon. Friend will therefore recognise the unusual circumstance of this Minister having no opinion whatsoever and merely serving this debate by listening carefully to what has been said.
As my hon. Friend said, the North-East Thames regional health authority has reviewed its cancer services. The review is not a cost-cutting exercise. As my hon. Friend rightly said, if fully implemented it would cost more money. It is intended to benefit patients not just in one part of the region, but in the entire region, as has been repeatedly demanded in parliamentary questions on this subject. If the proposals come to Ministers for a final verdict, my hon. Friend can rest assured that any decisions taken will ensure that the best overall service to patients in the region is provided.
It may help if I describe the timetable to my hon. Friend. If matters proceed as planned, the region expects to provide districts with a consultation document for issue in January 1987. The districts would then submit detailed proposals to the region with the results of the consultation. If the local community health council has objected, the matter will come to Ministers for a decision. We are therefore talking about a substantial period of time, even if matters proceed as planned. I can assure my hon. Friend that nothing will be done in a hurry.
If the radiotherapy unit at the North Middlesex hospital were to be closed, it would be the subject of full public consultation. Local people would have the opportunity to express their views, and I have no doubt that, with the assistance of their excellent Member, they would do so with force and in the appropriate detail.
The intention is to set up regional cancer treatment centres. Departmental guidance is contained in the report of the standing sub-committee on cancer, entitled "Acute Services for Cancer", which was circulated two years ago under cover of Health Notice (84)23. If my hon. Friend has not seen a copy, I shall gladly ensure that he sees either it or the relevant bits of it. He will find that it is a question not of fashion, but of careful consideration of how cancer patients should be treated, not only in the 1980s but well into the next century.
The report recommended that radiotherapy centres should normally serve a population of not less than 1 million—equivalent to about 4,000 new cases of radiotherapy a year. North East Thames regional health authority serves a population of about 4·4 million and has a resident population of about 3·7 million. On straightforward population criteria the region would require only four units. However, the region is also required to consider geographical matters, travelling patterns, and so on. On that basis the original proposal was for five centres, and following further review it decided on six. Unfortunately, there are at present nine centres. If the broad overall strategy is to be accepted, it follows that some will have to close. That is the crux of the matter.
I understand that it is suggested that the special cancer facilities are concentrated on six regional cancer treatment centres at the London hospital, the Middlesex, the Royal Free and St. Bartholomew's in London, and Colchester and Harold Wood in Essex. Those centres would provide the full range of cancer diagnosis and treatment.
As a result of the region's proposals, the existing radiotherapy units at the North Middlesex and University College hospital in London, and the Essex County hospital, Oldchurch at Romford and Southend in Essex would be subject to closure. The region tells me that it believes that the proposed regional centres would be of sufficient size to make the best use of both human skills and physical resources and to encourage staff to develop specialist expertise, particularly to aim for expert knowledge of particular cancers and thereby to add to the list of cancers that are now curable.
The difficulty with the North Middlesex hospital arises from the choice between it and the Royal Free. The regional health authority undertook an option appraisal on the two hospitals which showed that a regional cancer treatment centre at the Royal Free would be better placed to serve the catchment population and to provide the back-up specialist facilities required to support such a centre. I am told that it looked at referral patterns, the viability of centres and the impact of losing radiotherapy on either hospital. On that basis, the Royal Free was its preference.
The only factor favouring the North Middlesex, to quote from my brief,
was patient travelling difficulties, particularly for residents of Enfield Health Authority.
Obviously, I express no view, but I have heard with interest my hon. Friend's comments.
The broad overall strategy of introducing regional cancer treatment centres, which has been departmental strategy now for several years, was accepted by the regional health authority early this year nem. con. The strategy is accepted and not regarded as a fashion or a fad. it is regarded as the right way to run cancer treatment in future. The difficulty comes with how one applies it in practice. In other words, the principle is accepted, but the practice is a different matter.
I note what my hon. Friend said about teaching hospitals and the influence of consultants on large units. However, they have led the way in research on this important illness and demonstated methods of ensuring that cancer is no longer the killer that it used to be and that there is hope for sufferers.
I understand that the other cancer services will remain district-based. The regional health authority's intention is that the bulk of cancer treatment will continue to be provided at district level, that serices for chemotherapy, surgery, counselling, diagnosis and screening and health promotion will all be district-based. Consultants from the regional cancer treatment centres will hold clinics at local district general hospitals to enable their specialist expertise to be made available locally and to minimise as far as possible the travelling required for specialist treatment services.
I have inquired about community services for cancer patients in the Haringey district health authority area. I am told that they are quite good and are being further improved through advertisements being placed for two more MacMillan nurses who will work with cancer patients at home. They will be in addition to the existing nurse who is at present supported by district nurses. That arrangement will continue. Therefore, my hon. Friend's constituents can look forward to an improved service, particularly for those patients who are recovering from this illness at home.
My hon. Friend spoke about one or two aspects of treatment and compared chemotherapy with radiotherapy. I defer to his considerably greater knowledge on some of these subjects, but I can tell him that all these treatments are under constant review. Any assertion that a treatment works means that the treatment has to be rigorously tested on patients who are already ill, especially if those treatments are dangerous and produce side effects. That is true of both chemotherapy and radiation treatment, and we need to be absolutely assured that a treatment has benefits that outweigh any of its possible disadvantages before it is offered to a patient.
My hon. Friend spoke about survival rates. I agree that the record of his local health authority on cancer treatment centres is excellent, but I am sure he would agree that it also depends a little on how early in the progress of the disease patients present themselves. There is some evidence to suggest that in some parts of Britain where general practitioners and perhaps health promotion services actively encourage people to come early, that is exactly what they do and their survival rate, particularly for illnesses such as cervical cancer, are thereby much improved. We want to encourage that practice everywhere, and I am sure that my hon. Friend will agree about that. In response to his earlier comment, perhaps I should add that we do not have Health Service hospitals with dungeons. At least I hope we have not. If we have, I should like to hear about them.
The National Health Service is changing all the time and must respond to change. Shifts in population have considerably affected all the London regions. There are alterations in the patterns of illnesses affecting our ability to deal with them, and there are improvements in medical practice. As radiotherapy equipment becomes more sophisticated and as radiotherapy treatments become more refined, it is right that the provision of radiotherapy should be restricted to a few centres. The question which then arises is: which ones?
The rest of the cancer services in the North-East Thames region, comprising the majority of treatments, will be improved under the regional health authority's proposals, and that should command some acceptance. We appreciate the deep feelings of local residents which my hon. Friends, including my hon. Friend the Member for Edmonton, have represented to us. If we are required to take a decision on this matter, I can guarantee to my hon. Friend that we will take those feelings firmly into account.

Question put and agreed to

Adjourned accordingly at three minutes past One o'clock.